Lenovo takes record high share of PC and tablet market despite weaker demand across EMEA

Lenovo grabbed a record 21.2 per cent share of the PC market during its financial Q2 period, making it the number one PC vendor for two and a half years (ten quarters) in a row.

Overall revenues hit $12.2 billion in Q2, up 16 per cent year-on-year. However, Lenovo incurred $599 million in restructuring costs and a $324 million one-time charge to clear smartphone inventory in Q2, as well as posting a $714 million overall loss during the quarter.

In the PC Group, which includes PCs and Windows tablets, Lenovo’s quarterly sales were $8.1 billion, with pre-tax income of $406 million, down 17 per cent year-on-year.

Lenovo blamed this on "foreign exchange fluctuations hurting demand in EMEA and Brazil".

It shipped 15 million PCs in the quarter. In the worldwide consumer segment, Lenovo had record 19.7 per cent market share. Its goal is to achieve 30 per cent worldwide PC market share.

In the tablet market, Lenovo outgrew the market by almost 14 points with nearly one per cent growth verses a market decline of 12.6 per cent. It strengthened its worldwide number three position with record high 6.3 per cent market share, selling 3.1 million units.

In EMEA, Lenovo had consolidated sales in the second quarter of $3.2 billion, a year-on-year increase of six per cent, hit by foreign exchange moves and a "soft" PC market.

EMEA accounted for 26 per cent of Lenovo’s total worldwide sales. Lenovo was number two in the EMEA PC market overall, growing market share to 19.9 per cent, up 0.6 per cent year-on-year. In consumer PCs, it was number one for the seventh consecutive quarter, clocking 21.5 per cent share. 

In the Mobile Business Group, which includes products from Motorola, Lenovo-branded mobile phones, Android tablets and smart TVs, Lenovo’s quarterly worldwide sales were $2.7 billion, up 104 per cent year-on-year, due to the inclusion of revenues from Motorola. 

In mobile, Lenovo volume was up 11 per cent year-on-year with 18.8 million units sold, led by growth outside of China. In the first half of this fiscal year, outside China accounted for 70 per cent of volumes, while one year ago, it was only 19 per cent. 

In the Enterprise Business Group, which includes servers, storage, software and services sold under both the ThinkServer and System x brands, sales were $1.2 billion, up 5.5 times year-on-year due to inclusion of System x this year. 

“With strong execution, Lenovo acted swiftly and decisively to address challenges, while still delivering better-than-previous-quarter results,” said Yuanqing Yang, Lenovo chairman and CEO.

“Now, not only are we building a more competitive business model, but we are growing. In PC we hit record share with good profitability. In mobile, our strategy to shift our growth focus to outside of China continued to pay off, and we gained share and improved margin.

"The realignment of our organization and the restructuring of our cost structure will deliver results in the second half of the year. In enterprise, we reached an important milestone, growing revenue for the first time since our acquisition of System x. Digesting acquisitions and making transformations take time, but I am greatly encouraged by our strong results, and confident in both our near and long-term future.”

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