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Lenovo Continues Growth With Record Profits

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Lenovo is the world’s number two PC maker and is continuing to grow despite poor economic conditions and declining PC demand with its performance in mature markets such as the UK and US a particular reason for celebration.

The Beijing-based company reported record quarterly sales of $8.4 billion (£5.3bn) for the three months to the end of December 2011, and record pre-tax profits of $192 million (£121m). It now has 14 per cent of the worldwide PC market, it’s highest ever share, as well as continuing to dominate in China with 35 per cent share in its home country.



For the ninth quarter in a row, Lenovo has grown faster that any of the top four PC manufacturers a result of “Lenovo's continued focus on balanced growth across all geographies, customer segments and product lines.”

Sales in mature markets account for $3.6bn (£2.3bn) of revenue which represents a growth of 81 per cent year-on-year which Lenovo attributes to the success in Japan and Germany of the company’s joint venture with NEC and acquisition of Medion. The growth in Lenovo’s PC sales is in stark contrast with the overall industry decline of 8 per cent.



Looking at the breakdown in products from Lenovo, it was laptops which represented the largest contributor to the company’s sales, generating 53 per cent of the total sales revenue. Desktop shipments increased 32 per cent and Lenovo is now the number one consumer desktop PCs in the world and third largest commercial desktop PC provider in the world.

In China, Lenovo is putting its growth down to strong smartphone and tablet sales and during its earnings call CEO Yang Yuanqing confirmed it will ship its first smart TV, running Google’s Android 4.0, in its home country in April. So far Lenovo is not planning on shipping the TV to other regions at the moment.



With an expanding tablet portfolio and the soon-to-be-launched Lenovo Yoga Ultrabook, the Chinese company looks well placed to continue its extraordinary growth of the past two years.

Source: Businessweek

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