Lenovo Group, a Chinese technology company, saw a 20% increase in quarterly revenue, reaching $15.4 billion for the three months ending in June. This growth comes after a period of five consecutive quarters of revenue declines due to the post-Covid slowdown. The global personal computer market has begun to show signs of recovery, with IDC data indicating a return to growth in the first quarter of this year after nearly two years of declines. Global PC shipments rose by 3% to 64.9 million units, with Lenovo maintaining its position as the market leader with a 23% market share.
Lenovo’s diversification into software and services has been paying off, with the company’s infrastructure solutions group growing by 65% to $3 billion in revenue and its solutions and services group growing by 10% to $1.9 billion for the quarter. Currently, non-PC business accounts for 47% of Lenovo’s revenue mix, and company chairman and CEO Yuanqing Yang expects this share to increase to 50% in the near future. Yang believes a resurgence in IT spending by businesses and AI-driven demand will further boost the company’s business lines, including PCs, servers, and enterprise software.
The PC market is seeing a rise in “AI PCs” – computers equipped with specialized chips optimized for AI software. Lenovo has been a pioneer in this area, launching two AI PC models in May. Yang projects that 10% of Lenovo’s shipped PCs will be AI PCs by the end of the year, potentially rising to 50-60% by 2026. This AI boom comes at a time of rising China-U.S. geopolitical tensions, including restrictions on advanced AI technology exports. However, Yang expressed confidence in Lenovo’s ability to navigate these challenges by complying with regulations in all operating regions.
Lenovo’s net income for the quarter was reported at $243 million, exceeding analysts’ expectations. Its shares were down 0.99% in afternoon trading on Thursday. The company’s strong performance in the face of global market challenges and its strategic focus on diversification beyond its core PC business position it well for continued growth in the future. With a solid foundation in place and a strong outlook for its non-PC business segments, Lenovo is poised to capitalize on the growing demand for AI-driven technologies and IT solutions in the coming years.