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Lenovo smartphone shipments up 39 percent, now ships more phones than PCs

Lenovo has seen substantial growth in its smartphone business over the past 12 months, led by demand from emerging markets and its home country of China.
August 14, 2014

Lenovo is the world’s largest PC vendor, and has been since it overtook HP last year. The company has also been making strides in the smartphone market recently, and now actually ships more smartphones than PCs.

Over the past year, Lenovo’s handset shipments have increased by an impressive 39 percent, and reached 15.8 million units last quarter. By contrast, Lenovo delivered 14.5 million PCs over the same quarter. This boost in smartphone sales has seen the company’s net profit increase by 23 percent year-on-year from $214 million to $174 million, whilst revenue rose 18 percent to $10.4 billion.

Cast your mind back to Q2 global smartphone shipment figures for this year, and you may recall that Lenovo is comfortably sitting in fourth place. Similarly, second quarter shipment result for China, published earlier this month, suggest that approximately 13 million of Lenovo’s 15.8 million shipments are estimated to have ended up in its home country. Even so, Lenovo’s smartphone shipments grew almost 300% in Southeast Asia and more than 500% in Eastern Europe last quarter.

“Although China is still the most important market for our smartphone business, we think we have even more opportunities outside China,” – Lenovo Chief Executive Yang Yuanqing

Lenovo may hold close to 20 percent of the global PC market, but its smartphone shipments only accounted for 5.4 percent of the market last quarter. Fortunately for Lenovo, both smartphone and tablet shipments continue to show strong growth, and if big players, like Samsung and Apple, continue to slip, the gap could close over the coming years.

Smartphone Market Share Q2 2013 to Q2 2014
The big players have seen market shares fall year-on-year, whilst Chinese manufacturers have surged over the same period.

Yang also acknowledged that the company has benefited recently from the shift away from premium smartphone products, with global consumers opting for mainstream and entry-level products instead. This trend is particularly strong in emerging markets, where Lenovo is planning to focus additional attention in the future.

“With the Motorola acquisition, we can become an even stronger global player. Motorola’s business is very complementary to Lenovo’s smartphone business.” – Yang Yuanqing

Considering that the $2.91 billion deal with Google for Motorola is still in the making, the merger is currently pending regulatory approval in several countries, Lenovo could be set for a further boost to its smartphone market presence over the next 12 months.