updated 05:10 pm EDT, Thu August 14, 2014
First quarter results from reveal boost in movile devices, desktop computers
Device maker Lenovo has released its financials for the first quarter ending June 30, revealing revenues of $10.4 billion. While the company posted a year-over-year increase in overall revenues, figures from the smartphone sales shows a more revealing number, with sales tallying more than 15.8 million units, an increase of 39 percent. Income increased to $214 million, a 22 percent increase, while earnings grew 23 percent to $214 million. Gross profit increased 13 percent, to $1.3 billion.
"This has been a quarter of milestones for Lenovo -- record PC share, a number three ranking in worldwide tablets for the first time, and an even stronger number four global smartphone position," said Lenovo CEO Yuanqing Yang. "As the PC industry recovers, the smartphone market continues its shift from premium to mainstream, and our acquisitions of Motorola Mobility and IBM x86 proceed toward completion, we see even more opportunity to keep growing rapidly."
Sales in China spurred growth in Lenovo's smartphone division, as the company hit the number one spot in the market with 13 million units sold. Smartphones on a global scale saw a revenue increase of 32 percent year-over-year for Lenovo, totaling $1.6 billion in the quarter. The Asia Pacific market saw an increase that was 3.7 times the previous year for 1.5 million units sold. Europe Middle East Africa (EMEA) saw smartphone sales pass one million units for the first time.
Mobile business increased overall for Lenovo, as it moved into the third highest-selling company for tablets worldwide (based on shipments, not sales to end-users). Tablet shipments totaled 2.3 million, a growth of 67 percent. Lenovo states the growth represents an increase that is at "nearly eight times the pace" of the market.
Even with the growth in mobile, Lenovo continued to hold its grip on the PC market. Shipments were listed at 14.5 million units, an increase of 15 percent year-over-year. Lenovo states that it is the 21st consecutive quarter that it outperformed other industry manufacturers. Laptops were responsible for 49 percent of the company's total revenues, even though shipments were down 3.7 percent from last year.
Desktop PC shipments increased 12.1 percent year-over-year, compared to an industry-wide increase of only 2.4 percent, according to Lenovo. The company saw a boost of 1.5 share points, now capturing 17.5 share of the desktop market (again, based on shipments). Consolidated revenues hit $3 billion, an increase of 20 percent from the previous year. Desktop sales were responsible for 29 percent of Lenovo's total revenue.
In China, the company held a 37.1 percent share of the PC market. For the Asia Pacific market, Lenovo increased its market share by two points over the previous year, for a total of 15 percent in the first quarter. Lenovo hit the number one spot for PCs in 15 EMEA countries, along with the number one slot for notebooks. PC shipments in EMEA increased 4.8 share points for the quarter, hitting a record high of 18 percent.
In the Americas, Lenovo hit an all-time high market share of 12.5 percent. The increase represents a 23.7 percent increase in market share over the previous year. In the United States, PC share increased 1.5 points year-over-year for a record share of 11.3 percent.
Overall revenue from China was up two percent from the previous year, pulling in $3.8 billion in the first quarter of 2014-2015. The sales made up 36 percent of Lenovo's revenue worldwide.