Lenovo's Profits Surge by 65% in June Quarter Amid Strong Growth in 'Intelligent Devices
Lenovo reports a 65% increase in net income for the June quarter. The Intelligent Devices Group sees an 11% revenue growth, with PCs maintaining a 23% global market share. Lenovo focuses on integrating AI into devices, launching AI PC models and planning further developments in AI phones and tablets.
Surpassing analysts' expectations, the Beijing-based company reported revenue of $15.4 billion, outperforming the projected US$14.1 billion figure for the quarter.
This marks Lenovo's third consecutive quarter of revenue growth after a period of sluggish global demand since late 2022.
During the earnings call, Lenovo's chairman and CEO, Yang Yuanqing, attributed this success to the company's clear strategy, strong execution, innovation, operational excellence, and global advantages.
In the first quarter of the 2024-25 fiscal year, Lenovo achieved profitability across all business segments, with net income soaring by 65% to $315 million compared to US$191 million in the same period last year, based on non-GAAP reporting standards.
Lenovo's Intelligent Devices Group (IDG), encompassing PCs, smartphones, and tablets, experienced an 11% year-on-year revenue growth to US$11.4 billion in the quarter. The PC division maintained a 23% global market share, while the smartphone and tablet sectors saw revenue growth of 28% and 33%, respectively.
The company has been focusing on integrating artificial intelligence (AI) into its devices and servers, with AI PCs becoming a significant industry trend. These PCs are equipped with advanced processors enabling them to perform generative AI tasks on-device, rather than relying on cloud processing.
Lenovo introduced a dozen AI PC models in May and plans to unveil more during the upcoming IFA show in September and at Lenovo's Tech World event in October.
Executive Vice President Luca Rossi highlighted the importance of user experiences in AI PCs, emphasising the company's investments in R&D to enhance both hardware and software aspects for optimal user satisfaction.
In China, Lenovo offers models embedded with proprietary AI PC intelligence, tailored to comply with the country's regulatory framework and data sovereignty concerns.
Looking ahead, Lenovo anticipates a new refresh cycle in the PC market driven by AI PCs, with Yang projecting that AI PCs will represent over 50% of the industry by 2027. The company plans to expand its AI device portfolio to include AI phones and tablets, aiming to provide users with seamless AI experiences across various devices and ecosystems.
Lenovo reports a 65% increase in net income for the June quarter.
The Intelligent Devices Group sees an 11% revenue growth, with PCs maintaining a 23% global market share.
Lenovo focuses on integrating AI into devices, launching AI PC models and planning further developments in AI phones and tablets.
Source: SCMP