Lenovo profit boosted by smartphones, tablets (Update)

Jan 30, 2013 by Joe Mcdonald

Personal computer maker Lenovo Group said Wednesday its quarterly profit rose 34 percent to a record high on strong sales of smartphones and tablet computers.

The company, vying with Hewlett-Packard Co. to become the world's biggest PC maker, said it earned $205 million in the three months ending in December. Revenue rose 12 percent to $9.4 billion, also a record.

The results reflect a rapid shift in global consumer tastes toward mobile services. That is forcing traditional technology leaders to scramble to roll out new products and diversify into services as well as hardware.

Sales by Lenovo's mobile and digital home unit soared 77 percent to $998 million, though that was only 11 percent of total revenue.

The company said its smartphone business in China was profitable for the first time and handsets were launched in India, Indonesia, Russia and other markets. Shipments of media tablets rose 77 percent to 800,000 units.

"The strong performance of our mobile Internet business is a significant strength that we believe will help us drive sustainable growth even in challenging market conditions," said chief financial officer Wong Wai Ming in a conference call with reporters.

Lenovo shipped 9.4 million smartphones during the quarter, all but about 400,000 of them in China, according to chairman Yang Yuanqing. He said the smartphone business outside China is "still in the first stage" and Lenovo needs to invest to gain market share before focusing on profitability.

Revenues in the bigger but slower-growing PC market rose 7 percent to $7.9 billion.

Lenovo, which is based in Beijing and in Research Triangle Park, North Carolina, warned PC demand "remains challenging" due to weakening global economic conditions but said it plans to expand its cloud, services and other businesses.

In its home China market, PC shipments rose 2 percent, down from the previous quarter's 8 percent. Lenovo said that was still better than an industry-wide decline of 2 percent in China, raising its market share by 1.4 percentage points to a record 36.7 percent.

Shipments in the United States and the rest of North America rose 11 percent over a year earlier.

Lenovo released a new version of its ThinkPad notebook computer, the X1 Carbon, in August that it said was lighter and quicker to mimic the convenience of a tablet. Lenovo acquired the ThinkPad brand with IBM Corp.'s personal computer unit in 2005.

Explore further: EU Parliament votes to break up Google

not rated yet
add to favorites email to friend print save as pdf

Related Stories

PC maker Lenovo's quarterly profit up 45 percent

Nov 10, 2010

(AP) -- Lenovo Group, the world's fourth-largest personal computer maker, said Wednesday its latest quarterly profit rose 45 percent on strong sales in China and other emerging markets.

PC maker Lenovo says profit up 25 percent

Feb 17, 2011

(AP) -- Chinese personal computer maker Lenovo said Thursday its quarterly profit rose 25 percent on double-digit sales growth in developing markets.

China's Lenovo claims top spot for consumer PCs

Nov 08, 2012

Chinese computer maker Lenovo Group said it had become the global market leader in consumer and notebook personal computers, as it posted a 13 percent rise in second-quarter net profit.

PC maker Lenovo reports loss amid weak demand

Aug 06, 2009

(AP) -- Lenovo Group, the world's fourth-largest personal computer maker, reported a $16 million quarterly loss Thursday and said it faces pressure from weak global demand and intense competition.

Recommended for you

EU Parliament votes to break up Google

14 hours ago

The European Parliament voted overwhelmingly for the break-up of Google Thursday in a largely symbolic vote that nevertheless cast another blow in the four-year standoff between Brussels and the US Internet ...

Toyota finds new air bag issue, recalls more cars

18 hours ago

Toyota Motor Corp. recalled more than 40,000 vehicles in Japan on Thursday as part of a worldwide scare over defective air bags and is investigating a new type of air bag problem that could lead to further recalls.

Netflix sues Yahoo CIO for alleged kickbacks

Nov 26, 2014

Netflix is suing a former company vice president who is now chief information officer at Yahoo, accusing him of receiving money from vendors he hired to work with the video streaming company.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.