Lenovo recently announced that net profit for the first quarter increased by 30% year-over-year, inching the company ever closer to surpassing HP as the top vendor in the market. Lenovo’s net profit reached $141 million in the quarter, an increase from $108 million over the same quarter the previous year. In addition to that, the company’s revenue in the quarter was at $8 billion, a 35% increase year-over-year.
Lenovo also had a 14.9% share of the PC market, which put it second behind HP, Lenovo’s biggest rival. HP had a 15.5% share. Lenovo has consistently reported strong earnings as its market share expanded to surpass Acer and Dell, which is even more impressive considering the slowdown in the PC market due to weakening economic conditions and the increased popularity of tablets and notebooks.
Lenovo’s worldwide PC shipments increased by 25% year-over-year in the past quarter. In comparison, shipments by both Dell and HP decreased by nearly 12%. One of the main drivers for Lenovo’s business has been its dominance in the Chinese PC market, a market that has grown to become the largest in the world.
Lenovo said in a recent earnings report that China generated $3.5 billion for the company in the quarter, which also accounted for 44% of the company’s total sales. In addition to that, Lenovo has been expanding into emerging markets where its growth has been strong and shipments have increased in countries like India, Brazil and Russia.
Even though Lenovo’s notebook industry made up the majority of the company’s sales, the company has still been investing heavily in developing products outside the traditional PC space, like smartphones, tablets and smart TVs. During the first quarter, Lenovo’s business unit dealing with mobile and smart TV products reported sales increasing by 173% year-over-year, reaching $587 million.
These products made up 7% of the company’s revenue while Lenovo’s market share in smartphones in China reached about 10%, putting the company third behind Samsung and Chinese handset vendor ZTE.
Source: Computer World – Lenovo’s profit up 30%, mobile business unit continues to grow