Lenovo on Thursday announced financial results for its most recent fiscal fourth quarter and full year, and the world’s second-biggest PC maker didn’t disappoint. Despite an ongoing PC market slowdown that is hobbling its rivals, the firm posted record highs in annual sales, pre-tax income, earnings, and PC shipments.
“Despite a challenging macro-economic environment and ongoing PC industry transformation, Lenovo delivered a strong performance in the 2012/13 fiscal year,” Lenovo chairman and CEO Yang Yuanqing said. “Not only were we the fastest growing among all major PC players, with record market share, revenue and profitability, more importantly, our smartphone and tablet businesses saw dramatic growth.”
The Lenovo numbers would be impressive at any time. But with the PC market suffering from a year-long sales decline that many have likened to a PC Armageddon, the firm’s performance is all the more amazing.
Lenovo delivered full-year earnings of $635 million, up 34 percent year-over-year, on annual revenues of $34 billion, up 15 percent year-over-year. With record PC market share of 15.5 percent, Lenovo is closing in on the number one position in that market and should overtake HP sometime this year. (HP had roughly 15.7 percent market share in the same time period but is losing share over time. ) The firm sold a record 52.4 million PCs in the year, up 10.2 percent in a period in which PC sales have otherwise fallen about 8 percent. It is the only PC maker in the top five to post a gain in this time period.
So how did Lenovo accomplish what its competitors could not?
It may simply come down to choice. Lenovo offers an amazingly diverse range of PCs and PC hybrid devices, including various tablet-type PCs that can transform between different form factors. Crucially, Lenovo also offers a choice between Windows 8 and Windows 7 on its business-oriented ThinkPad products, which are particularly well-received and successful.
“We have a strong PC business foundation that we are confident will be even stronger and more profitable in the year ahead,” Mr. Yang said during an earnings conference call. “At the same time, we are now much more than a PC company.”
Lenovo is making a big splash in the smart phone market as well, though the firm doesn’t yet sell any of its devices in the US. According to Lenovo, its smartphone shipments were 3.7 times greater than last year globally and the firm is now the number two seller smart phones in China. As a result, Lenovo now describes itself as a “PC Plus leader,” and it plans to aggressively expand its tablet, smartphone and enterprise hardware sales worldwide as it has done with PCs. Lenovo expects to ship 50 million smart phones (up from 29 million last year) and 10 million tablets (up from 2.2 million) this year.