Lenovo succeeding at being less dependent on PC sales

Lenovo saw fiscal Q4 net income to March 31 fall 37 per cent to US$100 million year-on-year as it absorbed major acquisitions in the shape of Motorola Mobility and IBM’s low-end server business.

Strip out M&A charges, however, and net income was up 23 per cent, to US$194 million.

A greater share of mobile sales in group revenue, and continued strong growth outside China, show progress in Lenovo’s strategic direction, which includes becoming less dependent on PC sales.

Revenue for the three months to end-March was up 21 per cent, year-on-year, to US$11.3 billion. PCs accounted for 63 per cent, mobile 25 per cent, and nine per cent from the enterprise. The same quarter the year previously, PCs contributed 83 per cent of sales.

Aside from a strong performance in PCs – eight straight quarters as number one supplier – Lenovo also experienced increased market shares in both smartphones and tablets, up 1.2 and 1.3 percentage points respectively, year-on-year.

Citing IDC figures, Lenovo said it had a 5.6 per cent share of the global smartphone market at the end of March, and a 5.4 per cent share in the worldwide tablet market – performances that merited third spot in each market sector.

Helping mobile growth, of course, was Motorola. Motorola-related volumes were up 23.6 per cent, year-on-year.

Moreover, Lenovo saw five times growth in smartphone volumes outside China over the same period. More than half of Lenovo’s smartphone volume (56 per cent) now comes from outside its domestic market.

On a full-year basis, Lenovo could boast record sales of US$46.3 billion, up 20 per cent from its previous fiscal year.

There was record net income, too. Before M&A charges, that was up 22 per cent, to US$997 million.