Greenwood Trading – Chinese PC manufacturer sees profits jump on increased laptop sales despite contraction in market
According to Tokyo’s Greenwood Trading, Lenovo, the world’s largest maker of personal computers, has reported a 23% jump in net profit after laptop sales outperformed the broader market.
Profits jumped to $214 million in the three months to June while revenue rose to $10.4 billion, a jump of 18% over the same period last year.
“It’s not only in PCs where Lenovo’s making headway; they’re going great guns in other business areas too,” said Paul Iurio , a technology researcher at Greenwood Trading alluding to the company’s announcement that it had shipped more mobile devices than PCs for the first time. Lenovo sold 15.8 million smartphones and tablets representing a gain of 39% over last year.
Lenovo’s stock remained more or less flat for the day as much of the boost from the impressive numbers had already been priced in.
Lenovo has diversified away from its core business of making PCs and laptops as the market shrinks under the weight of competition from tablet computers but it maintains a strong presence in the business machines sector where the practicalities of tablet computing are woefully inadequate.
Greenwood Trading said it expects tablet sales to plateau as consumers struggle to find justification for upgrading to the newest models.
“There’s still potential for laptops and desktops going forward since operating systems and features continue to advance but given what little complex computing can actually be achieved on a tablet, there is very little point in shelling out another $400 for something that doesn’t do what it does any better than the first or second generation of the product,” added Iurio.
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