| 06 | Jun |
| 2013 |
Lenovo’s net profit rises 34% in fiscal year to March
Lenovo Group’s net profit jumped 34% in the last fiscal year ended in March, making it the only one of the world’s top-five personal computer vendors to avoid a decline in the global PC industry. A rise in market share and booming smartphone sales propelled Lenovo’s net profit to USD635 million. The world’s No 2 PC maker generated a revenue of USD33.9 billion, up 15%. At the end of March, Lenovo’s PC market share rose to 15.3% from 13.2% a year earlier. In the same period, it narrowed the gap with market leader HP whose share fell to 15.7% from 17.7%. Lenovo’s U.S. market share was nearly 9%, a new record in the firm’s history. Its market share in China, the world’s No 1 PC market, rose to 35%. Lenovo’s full-year smartphone sales jumped 3.6 times, ranking it No 2 in the domestic market behind Samsung. Lenovo’s Chief Executive Yang Yuanqing said that Lenovo would focus its investments this year on expanding sales of smartphones and media tablets worldwide, while quickly developing its enterprise server and storage system businesses. Lenovo, which has its headquarters in Beijing and in North Carolina in the United States, saw its revenue rise 4% last quarter to a record USD7.8 billion, up from USD7.5 billion the previous year. Wong Wai-ming, the company’s Chief Financial Officer, said: “This was the 14th consecutive quarter that the company achieved year-on-year growth, despite the overall PC market showing negative growth in the past four quarters.” While Lenovo operated in more than 160 countries worldwide, it reported that mainland China accounted for 43% of its total sales for the year. Yang Yuanqing said he expected Lenovo’s smartphones would be released in more emerging markets, while the company will also target Europe and North America.
“Lenovo will become the No 1 smartphone vendor within China in two years,” said Liu Jun, Senior Vice President of Lenovo and head of the company’s PC, smartphone and tablet businesses. Sales turnover of Lenovo’s smartphone business is projected to make up more than 15% of the company’s total by the end of this year, he said. On May 16, the Beijing-based manufacturer released its latest smartphone, the K900. Selling at CNY3,299, the company hopes the new device will attract customers away from Samsung’s Galaxy Note series and Apple’s iPhone 5. Lenovo hopes to sell 1 million of the new devices in China, offering high-end customers more options. Smartphones priced above CNY3,000 are categorized as high-end products. They took 10% to 15% of the market share in China, according to Chen Wenhui, Lenovo’s Vice President and head of its mobile business. Lenovo was the top local smartphone maker in terms of market share.
| 06 | Jun |
| 2013 |
Amazon to launch its Kindle e-book readers in China
Amazon is set to debut the long-awaited Kindle, the world’s most popular e-book reader, in China this month. The price of the Wi-Fi only Kindle Paperwhite will start from CNY849. Amazon will also sell the 3G Kindle in China as well as the Kindle Fire. The sales will begin on June 7, Sina.com and Sohu.com reported. Suning, one of China’s major electronics retailers, will sell the Kindle devices in the domestic market. Last month Amazon opened a mobile application store for Android phone and tablet users in China and in December, the company launched an online e-book store and related apps in China. China’s e-book market is expected to reach CNY8.23 billion in 2014, up 52% from CNY5.42 billion in 2012, according to an estimate from Analysys International. “I think that the Kindle products will pave the way for future marketing in China for Amazon,” Sun Peilin, Senior Analyst at the consultancy said. The Chinese e-book readers’ market is largely dominated by Shanda Interactive Entertainment’s Bambook and Hanvon Technology’s gadgets. But the market for e-book readers was dealt a heavy blow in the past two years by the emergence of devices such as the iPad.
| 06 | Jun |
| 2013 |
Hong Kong sales of tablets, smartphones and laptops surge in Q1
Total spending on smartphones, media tablets and laptop personal computers surged to HKD8.62 billion in Hong Kong on record sales of 2.03 million units in the first three months of the year. That was up 9% from HKD7.92 billion a year earlier when 1.93 million units were sold, according to market research company GfK. Walter Leung, Managing Director at GfK in Hong Kong, said purchases of the so-called “three screens” – smartphones, laptops and tablets – grew mainly on the back of strong demand for tablets and smartphones, especially those models with a larger display. Tablet sales in the first quarter grew to HKD1.68 billion from HKD1.05 billion a year ago, with the volume nearly doubling to 480,000 units from 243,000. Data from technology research firm IDC shows that the top five tablet brands in the first quarter were Apple, Samsung, Asus, Huawei and Acer. Smartphones rang up sales of HKD6.11 billion in the past quarter from HKD5.98 billion in the previous year, despite a decline in units bought to 1.44 million from 1.55 million. Samsung and Apple were the two most coveted smartphone brands in the market, according to telecommunications industry estimates, followed by Sony, HTC, and in a virtual tie, Nokia and LG Electronics. With greater demand for tablets, laptop sales dropped to HKD818 million from HKD880 million in the year-ago period. The number of units sold fell to 114,000 from 139,000, amid shrinking demand for personal computers in general. GfK, however, estimated that demand for ultra-slim laptop models with 11-inch displays has increased. The share of that segment rose to 15% in the first quarter, from 11% in the preceding quarter to December. Apple ranked No 1 among the city’s top five laptop brands, according to IDC, followed by Lenovo, Acer, Dell and Hewlett-Packard, the South China Morning Post reports.
| 06 | Jun |
| 2013 |
Chinese semiconductor maker SMIC plans Beijing plant
Semiconductor Manufacturing International Corp (SMIC), China’s largest semiconductor foundry, has signed a contract to participate in a USD3.59 billion joint venture in Beijing. Of the USD3.59 billion, SMIC and its wholly-owned subsidiary, SMIC Beijing, will invest USD660 million and hold a 55% stake in the business, which will design, manufacture and sell semiconductor wafers. Two firms owned by the Beijing government, Beijing Industrial Development Investment Management and Zhongguancun Development Group, will invest USD540 million and hold the remaining 45%. “The joint venture is expected to build up significant manufacturing capacity with a focus on 45-nanometer integrated circuits and aims to reach a manufacturing capacity of 35,000 wafers per month,” SMIC said. BOC International Analyst Tony Yang said it would take two to three years for the Beijing facility to make a significant contribution to SMIC’s revenue as the plant needed time to improve its yield. SMIC appointed a new Chief Operating Officer (COO), Zhao Haijun, on April 25, after its Chief Business Officer, Chris Chi, resigned on March 1. SMIC’s first-quarter results beat all analysts’ estimates, “retaining its upbeat performance for four quarters in a row”, a JP Morgan report said. SMIC swung to profit in the first quarter with net income of USD40.6 million, compared with a loss of USD42.8 million in the first quarter of last year, as revenue soared 50.8% to USD501.6 million, the South China Morning Post reports. The venture, which still needs government approval, will be located in the Economic Technological Development Area in Beijing.
| 10 | May |
| 2013 |
Lenovo holds steady as global PC market plummets
Lenovo, bolstered by its strong growth in North America, emerged unscathed after global personal computer shipments in the first quarter fell 14%, marking the industry’s worst quarterly decline. Lenovo’s worldwide shipments were flat in the three months to March, compared with a year earlier. The company was the only one among the industry’s biggest players that did not record a double-digit decrease in shipments in the period. Research firms IDC and Gartner estimated that Lenovo shipped 11.7 million personal computers and seized a 15% market share during the quarter to nearly close the gap with global leader Hewlett-Packard. Both IDC and Gartner also found that Lenovo’s first-quarter shipments to the United States grew 13% year-on-year to 1.3 million units. Lenovo remained the No 5 supplier in the U.S., the world’s second-largest market for personal computers after China. Gartner pointed out that Lenovo’s performance was affected by the slowdown in the Asia-Pacific, in which personal computer shipments dropped 10.3% year-on-year to 27.6 million units. A Spokeswoman for Lenovo said the company “continues to outperform its traditional PC competition”, and that “there is still plenty of room to raise marketshare in this market”. IDC said the extent of the year-on-year contraction in the past quarter marked the worst period since the research company began tracking the personal computer market quarterly in 1994.
Lenovo said it was in “preliminary negotiations” about an acquisition following reports that the Chinese company may purchase International Business Machines Corp’s server unit. IBM is seeking USD5 billion to USD6 billion for its x86 server business, according to information technology industry news website crn.com. In April, Chen Xudong, Senior Vice President and General Manager of Lenovo’s China unit, told China Daily the company is considering mergers and acquisitions (M&As) to strengthen its enterprise business. Lenovo is slowly shifting its focus from PCs to mobile devices such as smartphones and tablets. In the meantime, it is also seeking new frontiers in enterprise-level products and services because of higher profit margins. In 2012, Lenovo and U.S.-based data-storage company EMC Corp formed a joint venture to develop server and storage equipment. The two companies released their first co-branded server and storage products on April 2. The negotiations with IBM meanwhile seem to have reached an impasse. Lenovo is holding firm on getting “a reasonable price”. “The talks haven’t broken down, but there is a gap in the valuation [of the target business] between the buyer and the seller,” a person familiar with the discussions said.
The company is planning new marketing campaigns to place key products in various films and television shows this year. Lenovo Chief Marketing Officer David Roman said investing in the high-profile branding initiative was part of Lenovo’s goal to create a premium global brand “that resonates with our target youth audience” and to become known as “the world’s leading personal technology company”. He said Lenovo’s new IdeaCenter Horizon table computer, which will sell from early this summer for USD1,699, was the kind of “innovative product placement we’re trying to do because it is interesting”. The device, which has a 27-inch multi-touch display and Microsoft’s Windows 8 operating system, can be adjusted upright at a 90-degree angle for use as an all-in-one desktop computer, with separate keyboard and mouse. One of Lenovo’s high-profile product placements was in the 2011 Hollywood blockbuster, “Transformers: Dark of the Moon”. The movie introduced a new character called Brains, which transforms into a ThinkPad Edge Plus laptop.
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