Lenovo Posts Record $5.9 Bil. Sales in Q2
China’s top PC-maker reported record $5.9 billion revenues for the April through June quarter. It also nearly doubled pre-tax net profit to $123 million over the same period last year.
Lenovo’s highest profit in its 27 years is attributed to pre-tax net profit of $77 million in mature markets like the United States, Japan and Western Europe compared with $9 million in losses for the same period last year.
Lenovo’s revenue in mature markets was $2.1 billion, accounting for 34.6 percent of its global sales. The company plans to will shift its emphasis from growing market share to generating projects in mature markets where it has focused since the beginning of 2011.
Lenovo passed Acer Inc to become the world’s third-largest PC maker with a 12.2 percent global market share in the latest quarter thanks in part to having expanded its distribution channels through acquisitions, according to the U.S.-based research firm IDC. In January Lenovo announced a $175 million joint venture with Japan’s NEC Corp. In July it completed acquisition of Medion AG, a German multimedia and consumer electronics maker.
The PC sector has been Lenovo’s main business after its acquisition of IBM’s Personal Computing Division in 2005. The company said it will focus on the more lucrative business-computing sector, where the company has leverage in domestic and overseas markets.
“Although Lenovo’s market share in mature markets is still relatively small, it has a very strong advantage in the Chinese market,“ said Kitty Fok, vice-president of the research company IDC Asia-Pacific. ”We forecast China will continue to experience rapid growth over the next quarter, especially in the mobile Internet sector.”
Apple posted $3.8 billion revenues in China last quarter through sales of iPhones and iPads. Lenovo posted $2.8 billion in the same period. It plans to focus more on its LePhone smartphone and LePad tablet PC to secure a bigger share of the mobile Internet sector.
Lenovo sold 81,000 LePads last quarter and is aiming for 20 percent of China’s tablet PC market by the end of this year to challenge Apple.
“Our results show that Lenovo’s acquisition of IBM’s PC business has become a success,” said Lenovo CEO Yang Yuanqing. “In future quarters, we will take what we’ve learned from this acquisition and apply that knowledge toward our joint venture with NEC in Japan and our acquisition of Medion in Germany.”
Yang said Lenovo will continue to target acquisitions of overseas PC companies that occupy a large share of local markets.
