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Lenovo profit boosted by smartphones, tablets

Wed, 01/30/2013 - 4:32am
JOE McDONALD - AP Business Writer - Associated Press

Personal computer maker Lenovo Group said Wednesday its quarterly profit rose 28 percent on strong sales of smartphones and tablet computers but warned this year's market will be tough.

The company, vying with Hewlett-Packard Co. to become the world's biggest PC maker, said it earned $205 million in the three months ending in December. Global revenue rose 12 percent to a record $9.4 billion.

The results reflected a rapid shift in global consumer tastes toward mobile services. That is forcing traditional technology leaders to scramble to roll out new products and diversify into services as well as hardware.

Sales by Lenovo's mobile and digital home unit soared 77 percent to $998 million, though that was only 11 percent of total revenue.

The company said its smartphone business in China was profitable for the first time and handsets were launched in India, Indonesia, Russia and other markets. Shipments of media tablets rose 77 percent.

"Lenovo has not only achieved record revenue, profit and global PC market share last quarter, but also our smartphone and tablet businesses have delivered hyper growth," said chairman Yang Yuanqing in a statement. "We are confident that we can win through differentiation and will be the innovation leader in the PC Plus era."

Revenues in the bigger but slower-growing PC market rose 7 percent to $7.9 billion.

Lenovo, which is based in Beijing and in Research Triangle Park, North Carolina, warned PC demand "remains challenging" due to weakening global economic conditions but said it plans to expand its cloud, services and other businesses.

In its home China market, PC shipments rose 2 percent, down from the previous quarter's 8 percent. Lenovo said that outpaced an industry-wide decline of 2 percent in China, raising its market share by 1.4 percentage points to a record 36.7 percent.

Shipments in the United States and the rest of North America rose 11 percent over a year earlier.

Lenovo released a new version of its ThinkPad notebook computer, the X1 Carbon, in August that it said was lighter and quicker to mimic the convenience of a tablet. Lenovo acquired the ThinkPad brand with IBM Corp.'s personal computer unit in 2005.

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