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Lenovo's profits bounce back
2010-8-23
source:Global Times
August 20, 2010 The world's fourth-largest personal computer maker Lenovo said Thursday its profit for the first fiscal quarter ending June 30 climbed to $55 million from a $16 million loss a year earlier.
 
 

Boosted by the company's home market, China, and other emerging markets, Lenovo's global sales surged nearly 50 percent to $5.1 billion, bringing its global market share to 10.2 percent, its first double-digit figure.

For the third quarter in a row, Lenovo was the fastest growing of the top five PC manufacturers. It is also the fifth consecutive quarter that Lenovo outgrew the industry, the company said.

In China, PC sales grew by 50 percent to $2.5 billion, accounting for 48.7 percent of global sales.

Lenovo's market share for PCs in China, 28.7 percent, is the largest, though 1.1 percentage points lower than that of the fourth quarter of 2009.

Aiming to raise its market share, Lenovo will expand its sales network, covering over 80 percent of rural towns by the end of this year, vice president Chen Xudong was quoted by Tencent as saying.

Sales doubled to $821 million, or 16 percent of the total in other emerging markets including Russia, India and Latin America. Sales in the mature markets grew 38.5 percent to $1.8 billion.

Lenovo is also trying to transfer some businesses from PC, which contributes about 93.7 percent of its sales revenue in the quarter, to mobile Internet.

The company said earlier this year the mobile Internet market will surpass that of PC within five years. The company plans for mobile Internet to contribute to 10 to 20 percent of its revenue in the next five years.

Wang Liusheng, senior analyst with Analysys International, said the target is achievable as the demand for mobile Internet is huge.

Lenovo delivered its first smart phone LePhone in China in May.

Priced less than 3,000 yuan ($441.76), the phone, catering to Chineseconsumers, is far cheaper than the iPhone, which costs nearly 5,000 yuan ($736.27).

As of June 30, 100,000 units of LePhone had been sold. And Lenovo wants to make the number to 1 million units this year. Figures from Analysys showed a total of 13.48 million smart phones were sold in China from April to June.

After five years in retirement, Liu Chuanzhi, Lenovo's founder and chairman, returned to Lenovo in February 2009, when the company reported its first loss in 11 quarters. The company suffered two more losing quarters before rebounding to profit in the three months ending last September.