Lenovo Stumbles Again But Sees Imminent Industry Recovery

Lenovo, the world’s largest maker of PCs, reported its fifth-straight quarter of sales decline, but it now sees “clear signs of recovery” across the industry. The firm post a net income of $273 million on revenues of $14.41 billion for the quarter ending September 30. Those figures represent year-over-year declines of 54 percent and 16 percent, respectively.

“Thanks to our strong execution, operational excellence, and continuous investment in innovation, we delivered consecutive quarter-on-quarter performance improvements, indicating an encouraging trajectory to recovery,” Lenovo chairman and CEO Yuanqing Yang said. “With continuous execution of our intelligent transformation strategy, and with our AI ecosystem and partnership further strengthened, we will leverage our full-stack AI capabilities from pocket to cloud to enable hybrid AI applications for every enterprise and every individual, ultimately driving sustainable growth for our business.”

The Intelligent Devices Group (IDG) that includes Lenovo’s PC and smartphone businesses experienced a YOY revenue decline to $11.5 billion, but it was profitable, with an industry-leading operating margin of 7.4 percent. The firm noted that it remains the world’s biggest maker of PCs in both unit shipments and activations, “despite market challenges.”

Looking ahead, Lenovo says that it will “fully leverage generative AI to accelerate the launch of next generation AI devices, including the launch of an AI PC next year.” The firm announced last quarter that it was investing $1 billion in its “AI for all” initiative and it recently hosted its annual Tech World event, which focused on its “rich smart device portfolio including AI-enabled PCs, smartphones, and tablets, as well as AI-ready and AI-optimized infrastructure, solutions, and services.”