Lenovo profit up 23 percent as mobile grows
Lenovo said it earned $174 million in the three months ending in June
BEIJING (AP) - Lenovo Group, the world's biggest personal computer maker, said Thursday its quarterly profit rose 23 percent as its push into mobile devices started to pay off, with smartphones and tablet sales doubling.
Lenovo said it earned $174 million in the three months ending in June. Sales rose 10 percent over a year earlier to $8.8 billion.
Desktop PC shipments were flat but sales of smartphones, tablets and other mobile devices rose 105 percent. Laptop sales, which account for 52 percent of revenue, rose 4.7 percent.
The results reflect a rapid shift in consumer tastes toward mobile services. Traditional technology leaders are scrambling to roll out new products and diversify into services as well as hardware.
Lenovo's gains came despite an 11 percent decline in worldwide PC shipments in the April-June period. Research firm Gartner said earlier the PC industry is suffering its longest decline in history, with shipments down for a fifth straight quarter.
"We are impressed by Lenovo's strong execution," said Barclay's analysts in a report. "It is the only Asia PC company that is able to deliver market expectation results, facing strong headwinds from concerns about global PC and smartphone demand, as well as a slowdown of China's economy."
Sales in Lenovo's home China market rose 5.6 percent to $3.7 billion, providing 42 percent of revenue. They rose 29 percent in the United States and the rest of the Americas to $1.9 billion.
Lenovo edged past longtime industry leader Hewlett-Packard Co. last quarter to become the world's biggest PC seller for the first time, according to Gartner and research firm IDC.
Lenovo, with headquarters in Beijing and in Research Triangle Park, North Carolina, said it became the world's fourth-largest smartphone vendor during the quarter. It said global smartphone sales rose 132 percent.
"While driving profitable growth in our core PC business, we are rapidly transforming our company into a PC Plus company," said chairman Yang Yuanqing in a statement. "Lenovo is now better positioned than our competition to take advantage of these clear trends."
