Will we be seeing Lenovo on UK desks?

Mobile & tablets

by Ben Sullivan| 13 February 2014

Firm reports impressive Q3 but has yet to crack Europe, US.

Chinese hardware manufacturer Lenovo, which may well be in charge of the next Nexus 6 smartphone, has reported a 31% rise in third-quarter profits, landing them at $265.3 million, up from $247.2 million this time last year.

For the third quarter in a row, Lenovo's combined shipments of smartphones and tablets - 17.3 million devices - shot past the 15.3 million PCs it sold. It also continued to be the world's fourth largest smartphone supplier with 4.8 percent share, growing shipments 47 percent year-over-year.

However, it has still yet to penetrate Europe and North America, something that may change with the Motorola takeover and the release of a Nexus 6 device.

The net income rise of 29 per cent to $265.3 million for the October-December quarter was before Lenovo agreed to splash out $5.2 billion on Motorola and IBM.

"In the short term (the deals) will have a negative impact on performance," Lenovo CEO Yang Yuanqing told Reuters.

It could take three to five quarters to turn around, Lenovo later said.

Analysts predict a hard time ahead for Lenovo, though, with Samsung and Apple utterly dominating the global smartphone market.

Anshul Gupta, principal research analyst at Gartner, commented on the Motorola deal:

"The acquisition will provide Lenovo with patent protection and allow it to expand rapidly across the global market," said Mr Gupta. "We believe this deal is not just about entering into the US, but more about stepping out of China."

Last year, China accounted for 37% of all Lenovo's revenue, with the America's accounting for 21% and Europe, the Middle East and Africa together adding in 27%.

 

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