Lenovo finds rich pickings in EMEA

Lenovo sold a million smartphones in EMEA for the first time during the second calendar quarter of 2014--the company's fiscal 2014/2015 first quarter--helping to make the region the company's most profitable outside its domestic market.

The Chinese consumer electronics manufacturer generated an operating profit of $95 million (€70.9 million) in EMEA in the three months to end June, up $69 million on the same period of 2013 and $20 million sequentially.

In a presentation of the results Wong Wai Ming, Lenovo's CFO, revealed that smartphone sales in the region grew 6.8 per cent year-on-year in the recent quarter, and that the company remained the number one supplier of consumer PCs in 15 countries including Germany, Russia and Eastern European markets.

The brand awareness generated by Lenovo's PC sales in EMEA could position it well when it comes to selling smartphones in the region.

Lenovo's EMEA operating profit was only bested by its domestic figure of $209 million. Operating profits in other Asia Pacific markets hit $64 million, while in the Americas the figure was $25 million--$1 million less than the same period in 2013.

PCs remained Lenovo's top global revenue generator in the recent quarter, although the share of revenues generated from mobile devices increased from 13.7 per cent in the company's fiscal Q1 2013/2014 to 15.3 per cent in the recent period. Smartphone shipments grew 39 per cent year on year, which Wong said gave it a 5.2 per cent share of the global market.

Lenovo is on the brink of concluding an acquisition of Motorola Mobile from Google that Lenovo's chairman and CEO, Yang Yuanqing, said will make the Chinese company a stronger global player in the mobile phone market. The CEO added that Lenovo remains confident it can turn the Motorola business around in 12 to 18 months after the deal is completed.

The vendor also plans to push deeper into the mainstream entry-level smartphone market, as it bids to ramp its business in emerging markets.

Yang said Lenovo is preparing a new generation of tablet PCs and smartphones to "attack" the convertible PC segment--devices where the screen can be separated from the keyboard--and the so-called Phablet sector--devices that sit between smartphones and tablets in terms of size.

The company increased global tablet PC shipments 67 per cent year-on-year, which it estimated gave it a 4.9 per cent share of the global market. Yang noted that the tablet market might, in future, split into two areas: niche PCs focused on media consumption, featuring screens of at least 8-inches with optional keyboards; and big-screen smartphones.

For more:
- see Lenovo's results presentation [PDF]

Related Articles:
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IDC: Chinese smartphone vendors challenge Samsung, Apple
IDC: Worldwide tablet market grew 11% in Q2 2014
Lenovo seeks to take smartphone crown from Samsung, Apple
Lenovo predicts Motorola turnaround, but cautions it will take time

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