Business, Hardware

Lenovo: Profits Up 90%, Massive Smartphone Growth

The Chinese company seems to be riding the new smartphone wave, along with their already successful PC business. For their fiscal quarter that ended on March 31, Lenovo recorded a $127 million of net profit along with $7.8 billion in revenue. Mobile devices business now holds 9% of all sales the company had, and smartphone shipments were up by an incredible 206% year on year. The company has managed to gather $34 billion in full year sales, as well as the $801 million of pre-tax income.

Lenovo, Q412
Strong Smartphone Growth (middle chart)

?Despite a challenging macro-economic environment and ongoing PC industry transformation, Lenovo delivered a strong performance in the 2012/13 fiscal year. Not only were we the fastest growing among all major PC players, with record market share, revenue and profitability, more importantly, our smartphone and tablet businesses saw dramatic growth,? said Yang Yuanqing, Lenovo Chairman and CEO. ?In fact, smartphone shipments were 3.7 times greater than last year globally and we are now number two in the China smartphone market,? he added. The company plans to focus on investing even further into tablet and smartphone segments of the market – along with their signature enterprise hardware.

Lenovo Fiscal 2012
The company had a record fiscal year, despite the overall condition of the PC market

The PC transformation Yuanquing mentioned led to a minor decline in their desktop and laptop PC sales (2%), however, it still made up an 83% of their entire business. Moreover, Lenovo (OTCMKTS:LNVGY) has devised a strategy to attack the PC+ market, as the company does not believe in the ?post-PC? idea.

Lenovo’s plan is clear. Focus is to expand aggressively into the PC+ world and protect the PC market at the same time

Additionally, if things continue to develop this way, Lenovo will overtake the HP as the leading PC vendor. The situation in the first quarter of the 2013 was incredibly close, with Lenovo having 15.3% of the market share and HP having 15.7%.