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Lenovo's tablet business is booming, company growth now driven by mobile
Lenovo may have sounded a little cocky when the company’s CEO said that he will do that which Google never could, and turn Motorola to profit within a few quarters. Then again, Lenovo has reason to be confident, given the company’s recent polling as the fifth largest smartphone manufacturer in the world. Lenovo has now reported a substantial jump in in its fourth quarter profits, thanks in part to a boost in tablet and smartphone sales.
Lenovo’s fourth quarterly revenue reached $10.8 billion, a 15 percent increase over the previous year and passing the $10 billion milestone for the first time. The company’s third quarter profit grew even faster, with pre-tax income increasing 30 percent year-over-year to $321 million, while earnings grew 30 percent year-over-year to $265 million. Lenovo’s acquisition of Motorola is one of the likely causes for the large gap between revenues and profits. PC Plus products, such as smartphone and tablets, accounted for 16 percent of Lenovo’s total revenues, up from 11 percent one year ago, and seven percent two years ago.
In terms of unit sales, Lenovo shipped a record 32.6 million devices in the Q4 2013, with smartphone shipments growing by 47 percent over the year to 13.9 million, and the company’s tablet volume tripled to an impressive 3.4 million. So much for the tablet fad being over.
For the third straight quarter, Lenovo maintained its position as the world’s largest PC vendor, with its highest-ever quarterly market share of 18.5 percent, up 2.4 percent year-over-year. But more interestingly for us mobile enthusiasts, Lenovo’s tablet and smartphone shipments have now surpassed the company’s hugely successful PC business. Combined mobile unit shipments for the quarter reached 17.3 million, which just edged out the company’s computer shipments of 15.3 million.
Looking at market data for the entire of 2013 and 2012, we can see that Lenovo is one of the fastest growing companies in the smartphone sector, currently vying for third place with LG and Huawei. However, there’s still a long way to go before Lenovo can even think about closing the gap with the big two players. Even so, some strong product launches over the next couple of years could certainly make Lenovo one to watch.
All-in-all, 2013 was a very strong year for Lenovo, and not forgetting that this data doesn’t incorporate any of Motorola’s sales figures. If we were to tally those in, Lenovo would already be the third largest manufacturer in the world. With increasing demand for smartphone and tablet product, Lenovo’s acquisition of Motorola may help strengthen the company’s product line-up and help propel Lenovo even further up the mobile shipment rankings.