Lenovo has bucked the trend in what remains a challenging personal computer market by posting solid first quarter earnings and beating market expectations. The Chinese firm remains the world’s number one player in the PC market, and, in spite of a drop-off in all-round sales and currency headwinds, Lenovo has delivered “strong profits”.
Its share of the PC market rose by over 25 percent this last quarter alone, having performed slightly better than expected in mature markets.
“Although the macro-economy and our industries remain challenging, causing a decline in our revenue, we significantly improved our profit year-on-year through innovative products and strong execution”, said Yuanqing Yang, Chairman and CEO of Lenovo, in a statement. “Going forward, in PCs we will focus on high growth segments and leverage industry consolidation to resume growth.”
The Mobile Business Group, which includes Motorola and Lenovo-branded mobile phones, performed admirably this latest quarter
The Mobile Business Group, which includes Motorola and Lenovo-branded mobile phones, performed admirably this latest quarter, and while quarterly sales were down six percent year-over-year, the results were flat when adjusted for currency fluctuations. “In smartphones, we will leverage innovative, differentiated products and continue to shift to higher price bands to drive growth and turn around this business”, continued Yang. “In data centres, we will continue to expand in hyperconverged technology, and improve profitability in the hyperscale business.”
Lenovo bought Motorola in 2014, with a view to reducing its exposure to a shrinking PC market. However, the latest figures indicate that its mobile division is unlikely to turn a profit before the latter stages of 2017.
As much as the group’s mobile division was bought to stave off a decline in the PC market, Lenovo faces the prospect of further losses should it fail to formulate a more sustainable plan. Its focus on premium models is a start of sorts, though its bet on Motorola, for now at least, appears ill timed, with growth in the smartphone market beginning to tail off.