Lenovo Earnings Up 9 Percent in Q1 as Firm Looks to AI PCs
- Paul Thurrott
- May 23, 2024
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The world’s biggest maker of PCs reported that it earned a net income of $248 million on revenues of $13.8 billion in the quarter ending March 31. Those figures are up 118 percent and 9 percent, respectively, year-over-year (YOY), and Lenovo beat expectations.
For its full fiscal year 2023/24, Lenovo reported a net income of $1 billion on revenues of $58.9 billion. Those figures represent net losses of 45 percent and 8 percent, respectively, YOY.
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“Lenovo’s fourth quarter results clearly demonstrate that we have not only resumed growth across all our businesses but that our business momentum is accelerating, driven by the unprecedented opportunities brought by Hybrid AI,” Lenovo chairman and CEO Yuanqing Yang said. “Fueled by our intelligent transformation strategy and years of investment in innovation, we’ve built a full stack of AI capabilities and are at the forefront of pioneering the revolutionary AI PC market.”
Lenovo’s Intelligent Devices Group (IDG) delivered revenues of $10.5 billion in the quarter and $44.6 billion in the fiscal year. Its PC business is the biggest in the world as noted, with 23 percent marketshare, and it hit a record high market share in North America in the quarter.
Looking ahead, Lenovo expects PC sales volumes to “recover to pre-COVID levels,” while the AI PC segment will expand past its current premium products into the mainstream over the next three years. These AI PCs will “drive a new refresh cycle in the PC market,” Lenovo says.
“Most people’s next PCs will be AI PCs,” Mr. Yang said. “By the end of the year, 10 percent of our shipped PCs will be AI PCs. By 2026, this number could be increased to 50 to 60 percent.”
Interestingly, Lenovo can’t use Microsoft’s Copilot technologies in its home country of China because of governmental restrictions. But the firm said it will provide its customers in China with “a similar experience or even a better experience in some areas.” This experience will include solutions made by Lenovo itself as well as third parties.