Feeds

Lenovo chiefs chortle over decision to buy IBM's PC biz

Fat numbers from reorg'd Big Blue boxes

Security for virtualized datacentres

IBM may think it was a grand plan to exit the PC game by flogging its biz to Lenovo, but the Chinese vendor does not concur, as its Q1 sales rises show.

The concerted turnaround efforts continued for the seventh consecutive quarter since Lenovo dumped former CEO Bill Amelio, with sales up 15 per cent to $5.9bn and operating profits rising 51 per cent to $123m.

It seems there is life yet in the traditional boxes. It's true that the margins are small in comparison to those of IBM – which explains Big Blue's decision to offload the PC division – but Lenovo execs clearly feel vindicated by the numbers.

"Since we adjusted our leadership team in early 2009, our business continues to climb and everything has been executed well according to our original plans," said Lenovo chairman Liu Chuanzhi.

There are reasons for the self-congratulation though. Lenovo pushed up PC shipments more than 23 per cent during the quarter as the global market moved up 2.7 per cent – the ninth consecutive quarter it outgrew the market.

Big Blue last week celebrated the 30-year anniversary of the PC but one of its engineers behind the original design reckoned systems have seen their best days and are "going the way of the vacuum tube, typewriter, vinyl record..."

Chuanzhi disagrees: "Our results show that Lenovo's acquisition of the IBM PC business has become a success. In future quarters, you will see clearly that we will take what we've learned from this acquisition and apply that knowledge towards our joint venture with NEC in Japan and our acquisition of Medion in Germany."

Part of the reasons for Lenovo's surge is that it learned to love the channel, restructured to minimise direct sales conflict with resellers, and upped rebates to feature more on dealers' balance sheets.

China represented $2.8bn worth of sales for Lenovo in Q1, up 23.4 per cent; in the emerging market sales were $1bn; and it achieved $2.1bn in sales in mature markets, despite a 9.4 per cent slide in shipments during the quarter.

But the firm still has one eye fixed on the ongoing economic uncertainty despite the return to growth of the global PC market, and did not provide a Q2 forecast.

"Challenges to worldwide PC demand remain - such as the pace of global economic recovery and the ongoing debt crisis in Western Europe," Lenovo said. ®

Security and trust: The backbone of doing business over the internet

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Why Oracle CEO Larry Ellison had to go ... Except he hasn't
Silicon Valley's veteran seadog in piratical Putin impression
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.