Lenovo North America president: PC Plus strategy paying off
Lenovo Group, the world’s leading personal computer vendor, reported record revenues of $38.7 billion for the fiscal year that ended in March.
The company, which has headquarters in Morrisville and Beijing, saw 14 percent revenue growth in the year, with overall increases in its shipments of PCs, smartphones and tablets.
The company is the top vendor of PCs globally and has reported growth in its PC global market share even as the overall industry has seen contractions. For the full calendar year of 2013, Lenovo took the No. 1 spot in global PC shipments and, according to International Data Corp. and Gartner Inc., it held onto the top spot in the first quarter of calendar 2014.
But while Lenovo’s PC business is its core and contributes “by far the most financially to our top and bottom line,” Jay Parker, president of Lenovo North America, said the company actually sold more smartphones and tablets in the fiscal year.
It sold a total of 59 million smartphones and tablets in the period, up 7 percent. It had global personal computer shipments of 55 million in the fiscal year, which were up nearly 5 percent.
Parker said the company financial results prove that its PC Plus strategy, in which Lenovo is looking to grow into phones, tablets, and servers, is working.
“We put a lot of investment in that, energy and focus, (and it’s) paid off with some of the numbers,” he said.
He also said two major acquisitions that the company is poised to make will help accelerate Lenovo’s PC Plus business.
Earlier this year, the company announced a deal to acquire Motorola’s smartphone business from Google Inc. for $2.9 billion.
“They’ll be sold in markets around the world, but a good number of their sales happen here in the U.S. and so we’ll sell it under that brand here,” he said. “There’s enough equity and momentum that that makes a lot of sense for us.”
In addition, the company announced plans to buy IBM Corp.’s low-end, x86 server business for $2.3 billion. As part of the deal, Lenovo is expected to offer jobs to 7,500 IBM employees.
Company officials have said the acquisition is expected to “essentially double” Lenovo’s presence in North Carolina. When the deal closes, Lenovo is planning to move RTP-based IBM employees acquired through the deal to the former Ericsson Inc. campus in the RTP.
Both deals are still going through the regulator approvals, he said, and everything is on track.
Lenovo’s earnings were up 29 percent to a record $817 million in the fiscal year. Its shares were up 31 cents to $9.44 on the Hong Kong Exchanges and Clearing Limited stock exchange.