Being the largest PC seller in the world, when Lenovo announces its financial results the indicators also mark the health sector of the industry. So when the group Chairman and CEO Yang Yuanqing presented the fourth fiscal quarter and full-year end result on a positive note, a sigh of relief could be heard across the globe.
“Despite challenging market conditions, Lenovo saw revenue resume to growth in the fourth quarter, after five quarters of decline,” quipped the CEO. Lenovo has been seeing quarter after quarter of consecutive decline for its PC sales, a worrying trend for a company that pride itself in reviving the industry. PC was at the brink of oblivion facing onslaught from smartphones and tablets at one time, while mobile devices continue to question the form factor, notebooks or laptop have changed their role and quite effectively staved off tablet as its contender. Tablet sales have slump since with consumers preferring the 2 in 1’s and 360 mode notebooks instead. Lenovo was instrumental with its conquering of China and the rest of the world with its hardware that continued build on the IBM pedigree.
While it made 4.2% less compared to the year before at US$43 billion, its fourth quarter result rose by 4.9% a signal that its three-wave strategy is well on its way of turning the company around. Lenovo embarked on a massive growth spurt strategy in all areas of its involvement mainly to lead in PC, grow its mobile and data centre business and execute its Device + Cloud and Infrastructure + Cloud infrastructure. New businesses that will future proof its existing model.
Crown Jewels
Main driver for the company is still the PC and smart device business at the moment, chalking up more than 50% of its overall revenue. In fact it manages to beat overall market shipment -seeing shipment touch 66.6 million. China remains the engine for growth, millennial PCs models targeted for the younger generation with specific features saw triple digit expansion in its home nation, while Chromebooks and gaming notebooks continue its upward trend.
Focus will also be on its mobile business after acquiring Motorola from Google, much has not been forthcoming from the PC leader. Unlike its Chinese counterparts, Huawei and OPPO who have dominated the global smartphone market with innovative variants, Lenovo failed to take advantage of the back paddling giants of Samsung and Apple. But things could be different this year with Moto G5 finally being unveiled here and is refuted to be a finest of Moto series, paving way for Lenovo branded smartphones that will be discontinued.
Americas is still the biggest opportunity market for Lenovo, giving the group 30% of total sales with a healthy 8% growth with Asia Pacific coming in second contributing 18% in overall sales. Lenovo although being a large conglomerate is credited for precision tactics in markets it operates, its nimble small business mind set is key in capturing market share and keeping competition at bay.
