Lenovo sees Q2 profits surge

By Wang Xing (China Daily)
Updated: 2010-11-11 08:04
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Lenovo sees Q2 profits surge
Lenovo's stand at the 13th China Beijing International High-Tech Expo held in June. [Wu Changchun / For China Daily]

Computer maker expects LePad to lead the way forward in sales of tablet PCs

BEIJING - China's biggest PC maker Lenovo Group said on Wednesday that it expects sales of its tablet computer to see "explosive growth", once the product is launched in China in the first quarter of 2011.

The world's fourth-largest computer vendor, in terms of market share, on Tuesday reported a 44 percent surge in net profit in the second fiscal quarter ending September. Net income came in at $76.6 million, compared with $53.1 million in the same period of last year, as dynamic demand in the United States and Europe helped boost sales.

Yang Yuanqing, chief executive officer of Lenovo, said the company plans to launch its tablet computer LePad in China in the next quarter, and will roll it out to other markets later next year.

"We are confident that sales of LePad will boom in China," said Yang. He added that Lenovo's advantages in sales channels and ties with domestic partners will help its product outpace rivals such as Apple Inc's iPad.

Lenovo said in October it was delaying the launch of LePad, an Android-based device - a mobile operating system initially developed by Android Inc, which was purchased by Google in 2005 - and is regarded by the company as a serious competitor to its rivals in the emerging tablet PC market. The launch of the device had been scheduled for this year.

Yang said on Wednesday that the delay was mainly due to the need to perfect the product and develop its applications. He said the company aims to provide the best product in the tablet PC market.

Lenovo said on Wednesday that its worldwide PC shipments grew 33 percent year-on-year in the second fiscal quarter, compared with a global industry growth rate of approximately 9.7 percent.

That takes the company's share of the worldwide PC market to 10.4 percent.

Meanwhile, Lenovo's PC shipments in mature markets increased 40 percent during the second quarter, outpacing an industry growth rate of just 3.4 percent in the region.

"With the right strategy and strong execution, we not only maintained strong growth and good profitability in China, but our business in mature markets became our profit engine," said Yang.

Lenovo's revenue from mature markets in the period reached $2.1 billion, or 36 percent of the company's worldwide sales, it said.

China's PC shipments grew by only about 13 percent in the third quarter of this year, compared with 38.8 percent growth in the first quarter, according to figures from research firm IDC. Antonio Wang, an analyst at IDC, said the slowdown is mainly due to consumer uncertainty about the financial outlook, and the government's recent efforts to cool the economy.

Yang said that he expects China's PC market to continue its rapid growth in the coming years, as the government's 12th Five-Year Plan (2011-2015), which will encourage domestic demand and upgrade the manufacturing industries, will help to boost consumption.

China Daily

Lenovo sees Q2 profits surge