Lenovo posts record $5.9b sales revenue
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China Daily, August 19, 2011
The technology giant Lenovo Group, the third-largest PC maker by market share, on Thursday reported quarterly sales revenue of $5.9 billion for April through June and pre-tax net profit of $123 million, nearly double compared with the same period last year.
Lenovo attributed the result - the company's highest in 27 years - to pre-tax net profit of $77 million in mature markets such as the United States, Japan and Western Europe. It was facing $9 million in losses for the same period last year.
Lenovo's sales revenue in mature markets was $2.1 billion in the quarter ended June, accounting for 34.6 percent of the company's global figure.
According to the company, it will shift its emphasis from market share to profit-generating projects in those regions.
Lenovo Chairman Liu Chuanzhi at the earnings call said the company has been placing its focus on mature markets since the beginning of this year.
In January, the company announced a $175 million joint venture with Japan's NEC Corp. In July, Lenovo completed its acquisition of Medion AG, a German multimedia and consumer electronics maker.
"Our results show that Lenovo's acquisition of IBM's PC business has become a success. In future quarters, we will take what we've learned from this acquisition and apply that knowledge toward our joint venture with NEC in Japan and our acquisition of Medion in Germany," Lenovo's CEO Yang Yuanqing said.
Lenovo Group surpassed Acer Inc to become the world's third-largest PC maker with a market share of 12.2 percent in the latest quarter and has benefited from its expanded distribution channels through acquisitions, according to the US-based research company IDC.
Yang said the company will continue to focus its acquisition targets on overseas PC companies that occupy a large portion of local markets.
The PC sector has been Lenovo's main business after its acquisition of IBM's Personal Computing Division in 2005. The company said it will focus on the more lucrative business-computing sector, where the company has leverage in domestic and overseas markets.
"Although Lenovo's market share in mature markets is still relatively small, it has a very strong advantage in the Chinese market. We forecast China will continue to experience rapid growth over the next quarter, especially in the mobile Internet sector," said Kitty Fok, vice-president of the research company IDC Asia-Pacific.
Apple Inc received $3.8 billion in sales revenue in China last quarter through sales of iPhones and iPads, while Lenovo saw $2.8 billion in the same period.
Lenovo said it will place greater emphasis on its LePhone smartphone and LePad tablet PC in order to grab a greater share of the mobile Internet sector.
In the earnings call on Thursday, the company said it sold 81,000 LePads in the last quarter and aims to occupy 20 percent of China's tablet PC market by the end of this year to compete with Apple.
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