Lenovo Revenues Plunged 24 Percent in Q2 as PC Sales Slump Continues

Lenovo reported that it earned a net income of $191 million on revenues of $12.9 billion for the quarter ending June 30. Those figures represent falls of 66 percent and 24 percent, respectively.

“Revenue from the non-PC businesses accounted for 41 percent of [overall] revenue, with the service-led business achieving strong growth and sustained profitability, further demonstrating the effectiveness of Lenovo’s intelligent transformation strategy,” the Lenovo announcement explains. “Despite the past quarter’s challenging market and unfavorable macroeconomic conditions, Lenovo sees signs of market stabilization and improvement, component prices bottoming out, and believes the client device market can be expected to recover and resume growth in the second half of this fiscal year.” (Lenovo’s fiscal year ends March 31, 2024.)

Despite a 28 percent drop in revenues from PCs and phones, Lenovo maintained its position as the world’s largest maker of PCs in the second quarter, obtaining what it says is 23 percent marketshare. As you may recall, I previously reported on IDC’s analysis of that quarter, and this is where that figure comes from: IDC says that Lenovo sold 14.2 million PCs in the quarter. But since then, Gartner has weighed in on the quarter as well, and it estimates that Lenovo sold 14.3 million units, achieving 24 percent marketshare. Close enough, and averaging the numbers out, Lenovo’s unit sales fell by about 19 percent year-over-year (YOY).

Lenovo cites “market challenges” as the reason for its PC and phone sales decline, but it points to AI as the driver for future growth, particularly with PCs.

“Looking ahead, Lenovo is leading the transformative shift in personal computing, where, to meet the needs of new generative AI workloads, the PC will also need to transform itself into an AI PC,” the firm noted. “Lenovo sees the future of AI PCs as a disruptive, hybrid blend of client, edge, and cloud technologies, ushering in enhanced functionality, speed, creativity, and immersive realistic experiences.”