Lenovo Notes PC Sales Surge in Earnings

Posted on August 16, 2018 by Paul Thurrott in Hardware with 8 Comments

Lenovo this week announced its most recent quarterly earnings. Of particular note, the firm saw its best PC sales growth in four years.

“Personal Computers and Smart Devices reported $7.7 billion in [quarterly] revenue, up 16 percent from the same period a year earlier and the highest growth in four years,” Lenovo noted. “For the year, [this part of the business] reported $32.4 billion [in revenues], up 8 percent from [the prior fiscal year].”

So that’s good news. And it’s interesting to me on two levels.

First, we’re always looking for any signs of life in the PC market. And with this market showing small gains in each of the past two quarters, the question is whether we’re seeing a bottoming-out, or leveling-off, of what had been a years-long sales free-fall. Or whether, as I suspect, we’re hitting a one-time bump based around Windows 10 upgrades to corporations that we may later view as the PC’s last stand.

Secondly, Lenovo was once the world’s biggest maker of PCs, but it has fallen behind HP in recent years. As such, the firm has recast itself as a “three-way” company and not just a PC maker. So in addition to PCs, it has major focuses on data center computing and mobile computing.

Each of those businesses grew in Lenovo’s most recent quarter. But the PC part of the business remains Lenovo’s biggest, and by a wide margin. For example, Lenovo earned as many revenues in this past quarter as it did in mobile for the entire fiscal year.

So it perhaps interesting to see Lenovo beating the same drum as Microsoft: It focused on marketing the future while it’s actually still making most of its money on the past.

“Lenovo’s vision has long been to become a global leader in intelligent transformation,” chairman and CEO Yang Yuanqing said. “We will focus on building competitiveness in Smart IoT devices, data center infrastructure, and vertical intelligent solution, and we are well positioned to take advantage of smart IoT and intelligence era.”


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Comments (8)

8 responses to “Lenovo Notes PC Sales Surge in Earnings”

  1. Martin Pelletier

    I am tempted to buy a Lenovo Legion model for gaming. But it seems they don't offer Thunderbolt 3. Have you even got one for review Paul?

  2. ecumenical

    Please release the next x1 series with 16:10 displays (I would also accept 3:2). You'll get one more sale for the next fiscal year.

  3. Bats

    I do have good news to report, with regarding Windows 10. My firm will upgrade to Windows 10. It's currently in the testing phase with certain employees. However I am not one of them. From what I am hearing there are soooooo many problems with it right now. Hopefully that will all get worked out.

    As for the news with Lenovo, I think it's really nothing. Windows PCs will fall as they are continuing to do now. The question is, at what rate of speed will it do so? Microsoft needs that rate of speed to be slow, in order to buy it time to create something new.

    If you ask me, Microsoft needs to create a new OS. One that rivals ChromeOs and turns the PC into a lean OS that the rest of the people will use. Not just a new Microsoft OS is needed, but a new name as well.

    • SenorGravy

      In reply to Bats: I have a solution. Create an Edge based ChromeOS competitor and call it:

      surfOS. Pronounced Surface. The best way to surf the web.

      You're welcome, Redmond.

    • skane2600

      In reply to Bats:

      "If you ask me, Microsoft needs to create a new OS. One that rivals ChromeOs and turns the PC into a lean OS that the rest of the people will use."

      Sure, who wouldn't want to trade an 80% market share for a < 1% share? If you have a cash cow, you keep riding it as long as it pays off. If Windows' market share drops below 30%, than MS will need to start on a Plan B.

  4. kdjones74

    I think this uptick in PC sales are coming from business needing to replace Windows 7 machines before the 2020 end of support deadline. My company started upgrading to Windows 10 last year and we're replacing machines that don't support Win10.

  5. obarthelemy

    I'm holding off on upgrading my 6yo Core i5 until there's a silicon fix for all those speculative execution exploits. Am I being too cautious ? I also kinda hope I'll be able to forgo a graphics card (currently on a 1060 which is about what I need for my "senior gaming" bouts ;-p)

  6. ibmthink

    Another similarity with Microsoft is that Mobile is a lost cause for Lenovo. Since they bought Motorola (like Microsoft bought Nokia), Lenovo's market-share in phones has dwindled to insignificance. And they don't make any profits with phones, mobile is only producing loss.

    They should try to sell off the Motorola brand and leave the mobile market. Instead of using the PC profits to compensate the losses of the mobile business, invest that money in PC development – and development of future technology (ambient computing, VR/AR).

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