This is despite a slowing of the PC market. It has also cornered 4.5% of the global smartphone market.
Lenovo, the world’s biggest computer manufacturer has reported a rise of 64% in its net profit, beating analysts’ estimate. The surge is despite tepid sales of personal computers and smartphones.
The Chinese company has reported a net profit of $173 million for the quarter ended June 30. This is up from $105 million, its revenue from the same quarter a year ago.
Revenues from its first quarter had however dropped by 6% to $10.05 billion, from a year earlier. The average analysts estimate was $9.63 billion.
“The PC market performed slightly better than expected due to stronger performance in mature markets,” said Yang Yuanqing, Lenovo’s chairman and CEO.
He went on to add, “Competition in the China smartphone market remained very keen while demand remained soft due to the slow economy.”
Despite the slowing sales in the PC sector, Lenovo has managed to consolidate its position during this quarter which was marked by a fall in PC shipments by 2%. In the previous year, the PC market declined by 4%.
Like its peer Xiaomi, Lenovo has diversified its products to stay relevant in the intensely competitive low margin market in China. Lenovo has retained its top dog position in the handset market despite the slowdown affecting the Chinese economy.
Ken Hui, an analyst at Jefferies, wrote in a note to clients saying, Lenovo had an “urgent need to formulate a sustainable strategy in smartphones, particularly in China”, citing intense competition from domestic rivals with extensive sales networks in China, including Huawei Technologies Co Ltd.
According to TrendForce, a market research firm, Lenovo had a 4.5% share of the global smartphone market in April-June, making it the 7th top smartphone manufacturer in the world, after Samsung, with a market share of 24% followed by Apple’s 15%.
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