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Lenovo Group Ltd managed to buck the trend in a year where most of the other personal computer makers withered. The world's largest PC maker on Thursday reassured investors with a healthy PC business, growing enterprise unit and not-too-bad smartphone sales in its annual results.
The Beijing-based company reported net income of $997 million for 2014, up 22 percent year-on-year. Its gross profit for the full year surged to $6.7 billion. Lenovo, listed in Hong Kong, said its PC shipments increased by 2.7 percent year-on-year in the company's fourth quarter that ended on March 31. The company said its market share improved across all regions.
The PC business continued to be the main profit generator for Lenovo amid competition from United States rivals Hewlett-Packard Co and Dell Inc. Yang Yuanqing, Lenovo chairman and chief executive, said he expected the firm will control about 23 percent of the global PC shipments by next year. Lenovo accounted for 19.6 percent of the shipments by the end of March, according to International Data Corp.
"The vendor continued to aggressively court expansion outside of Asia, especially closing the gap with competition in Europe and the Middle East," said an IDC report. "It also moved ahead of Apple to capture the third position in the US during the first quarter of the year."
Following the acquisition of IBM Corp's x-86 server unit, Lenovo incurred a loss of $45 million. However, the company said the enterprise business group is on track to become a $5 billion business.
The biggest achievement for Lenovo was to maintain its third position in the global smartphone market. Although buying the Motorola Mobility brand from Google Inc made Lenovo look stronger in the high-end market, the loss-making unit contributed little to its market share growth.
The company was forced to keep pace with Apple Inc even as it had to stave off challenges from firms like Xiaomi Corp, Samsung Electronics Co and Huawei Technologies Co Ltd.
CK Lu, principal analyst at research firm Gartner Inc based in Taiwan, said: "We don't yet see the synergy between Lenovo and Motorola. To retain its third position, Lenovo needs to make better use of the Motorola brand and technology, especially in overseas markets, as well as in its relations with Google."
Lenovo's Yang said the integration of Motorola Mobility and System x businesses are underway and realizing good growth momentum. But he admitted it will take some time for the units to become core businesses, like PCs.
At a media interview on Thursday evening, Yang underlined the importance of transforming the company into a swift, flexible enterprise that can quickly respond to emerging market changes.
gaoyuan@chinadaily.com.cn
