Business

China’s Lenovo denies concerns that the global PC market is shrinking


Lenovo CFO Wai Ming Wong on the company's full-year results and outlook

Revenue of the world’s largest PC maker Lenovo Chief financial officer Wong Wai-Ming said it fell for a third straight quarter as global demand for personal computers continued to decline, but the company wasn’t worried.

“We’re number one in PC. Obviously, when the market really returns to more normalcy, we’ll definitely grow,” Wong Wai-Ming, Lenovo’s chief financial officer, told CNBC.

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He added that the company is actually seeing higher growth in other businesses like infrastructure solutions and services.

In it latest earnings report On Wednesday, Lenovo said it expects “the PC market to grow again” in the second half of 2023.

The company posted a drop in revenue for the January-March quarter. Revenue for the quarter amounted to $12.63 billion, down 24% from a year ago and marking the third consecutive quarter of decline year-over-year.

“The fourth quarter of the fiscal year was the most challenging quarter of the year due to pressure from both the PC market and the global economy,” Lenovo said in its earnings report.

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However, the CFO is optimistic that the non-PC businesses — devices, infrastructure solutions and solutions & services — can help diversify the business.

“Our full-year revenue didn’t actually drop that much in reality as the other two business groups drove significant growth in part thanks to our infrastructure business. Profits have also been minimized. or offset by significant growth in our services business,” Wong said.

Lenovo’s non-PC businesses grew 7% and now account for nearly 40% of total revenue for the year to March. The remaining 60% of revenue still comes from the PC business.

“The revenue structure of our non-PC businesses has grown by nearly 40%. Our clear strategy is working and our operations are agile, even in the face of challenges. global turmoil,” Yuanqing Yang, President and CEO of Lenovo Group said during the earnings call. “Next time, we will continue to invest in [research and development] to capture the next wave of growth opportunities, so we’re well prepared for the future.”

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Lenovo’s device sales fell 33% year-over-year in the first quarter.

But Wong is optimistic that artificial intelligence will boost the company’s devices business. Wong told CNBC that the acceleration of digitization, artificial intelligence, and chatbots “really requires devices” to take advantage of them.

“Ultimately, we’ll have three main business growth groups driving revenue instead of what we had before — with PCs the main driver. Over time, we’ll have three business groups that drive revenue. push profits,” Wong said.

Shares of Lenovo fell 1.8 percent in Thursday morning trading.

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