Lenovo Eyeing Mobile Device, Smartphone, Small Business Markets

Lenovo reports that its worldwide PC shipments grew 42 percent year over year during its latest financial quarter. Feeling good, Lenovo is now out to conquer small businesses, emerging markets and the mobile Internet device market.

From Hong Kong on Feb. 4, Lenovo announced the happy results of its fiscal third quarter of 2010, which ended Dec. 31.
Lenovo's worldwide PC shipments increased 42 percent year over year, and for the third quarter in a row it achieved its highest-ever worldwide market share of 9 percent. Its pretax profit for the quarter was $94 million, and consolidated sales during the quarter increased 33 percent year over year-another record-to approximately $4.8 billion.
Also during the quarter, Lenovo announced its intention of buying the entire interest of Lenovo Mobile Communication Technology from an investor group, expanding its participation in China's fast-growing mobile Internet device market.
"For the first time since the acquisition of IBM PCD [nearly five years ago], Lenovo was the fastest-growing PC company in the world," Yang Yuanqing, Lenovo's CEO, said in a statement. "In the future, while we continue to expand our PC business, we also want to attack the mobile Internet category to drive growth and capitalize our innovation efforts."
During the quarter, Lenovo's worldwide notebook PC business increased 46 percent year over year with consolidated sales of $3 billion, generating 62 percent of Lenovo's total sales revenue.
And while the overall desktop industry reportedly decreased by a percentage point, Lenovo's desktop shipments increased 18 percent year over year, accounting for 36 percent of Lenovo's total sales revenue.
"Lenovo is hitting its stride," John Spooner, an analyst with Technology Business Research, wrote in a research report. "Lenovo's [fiscal third-quarter] earnings revealed that the PC maker is rapidly increasing its consumer and small business sales in emerging markets, while maintaining in the mature markets where it is more entrenched in the corporate space."
Spooner describes Lenovo as being in "full-on attack mode" in going after consumer and small and midsize business markets, as well as increasing its presence in emerging markets such as India and Russia.
"Lenovo's growth engine is now its IdeaPad product lineup. But the company sees opportunity to deliver even lower-priced devices to customers in rural China and other markets," Spooner wrote.
Lenovo will further invest in these efforts by "adding non-Windows and non-Intel-based wireless devices, including cellular phones and netbooks, to its product mix," he said. "TBR expects Lenovo to concentrate on growing sales within its newly reacquired cellular phone business, while expanding shipments of devices such as its Skylight netbook."
On Jan. 5, Lenovo introduced the LePhone, a smartphone for the China market that will likely become available midyear. It runs the Android operating system, uses Qualcomm's Snapdragon chip set and features a 3.7-inch display.