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Lenovo to transform into a 'hardware and software' firm after posting record revenues - PC Retail

Lenovo to transform into a 'hardware and software' firm after posting record revenues

Vendor delivered a record 60m PC shipments
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Lenovo has posted record revenues, PC shipments and market share for its financial year ending March 31st 2015.

And it said it is ready to transform itself from making mostly hardware to a combination of hardware and services.

63 per cent of its Q4 revenue came from PCs, 25 per cent from mobile and nine per cent from enterprise. Last year, PCs made up 83 per cent of the business.

Lenovo shipped a record 60 million PC shipments during the full year 2014-2015 and its PC sector saw an increase during Q4 2015, with sales up by 11 per cent year-on-year, reaching $7.2 billion (£4.59 billion).

EMEA accounted for 26 per cent of Lenovo’s worldwide revenue in Q4, including smartphones and PC sales. The firm now holds the number one position in PCs across 17 countries in EMEA. It also had a record PC market share in EMEA of 20.5 per cent, up 4.8 points during the fourth quarter.

In Q4, Lenovo shipped 13.3 million PCs, up 2.7 per cent year-on-year. The company’s market share has since increased to 19.5 per cent.

For the full year, Lenovo had record revenue of $46.3 billion (£29.5 billion), up 20 per cent year-on-year. Gross profit for the full year was also up by $6.7 billion (£4.27 billion), an increase of 32 per cent year-on-year.

During Q4 2015, Lenovo’s gross profit grew to $1.8 billion (£1.1 billion), an increase of 43 per cent.

Lenovo said that ‘even with currency pressures’, its revenue in EMEA during the fourth fiscal quarter grew, with revenue up 15 per cent to $3 billion (£1.9 billion).

Lenovo’s Mobile Business Group also saw strong results, with the firm’s quarterly sales reaching $2.8 billion (£1.7 billion). It shipped 18.7 million smartphones in Q4 and a record 76 million in FY 2014/15, securing the company’s position as the world’s number three smartphone vendor worldwide.

In addition, within the company’s Enterprise Business Group (EBG), which includes servers, storage, Lenovo’s ThinkServer brand saw a 49 per cent revenue growth year-on-year.

Both Lenovo’s ThinkServer brand and the System x business unit saw sales of $1.1 billion (£702.55 million), while the company’s standard PTI – which included non-cash, M&A-related accounting charges – was negative $45 million (£28.7 million). The server arm remains a $5 billion (£3 billion) business.

Yang Yuanqing, chairman and CEO of Lenovo, said: “Lenovo continues to deliver strong and balanced performance. Building on our newly acquired businesses and consistent organic growth of our core operations, three growth engines have been formed.

“While our Mobile Business Group and Enterprise Businesses Group grew rapidly, our PC business delivered even stronger results, with record market share and increased profitability.

“The integrations of Motorola Mobility and System x businesses are on track and realising good growth momentum, although further time will be required to develop them before they become core businesses like PCs.

“In view of the opportunities and challenges of the new internet plus era, we are ready to transform ourselves from making mostly hardware to a combination of hardware and software services. This will spur a new wave of growth for Lenovo in the coming years.”

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