China’s Lenovo brushes off issues that international PC market is diminishing

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

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Revenues for the world’s biggest PC-maker Lenovo succumbed to a 3rd successive quarter as international need for desktop computers continue to drop, however the business is not fretted, states CFO Wong Wai-Ming

“We are number one in PC. Clearly, when the market actually returns back to more normal, we will definitely be growing,” Wong Wai-Ming, CFO of Lenovo, informed CNBC.

He included that the business is in fact seeing greater development in other services such as facilities options and services.

In its newest profits report on Wednesday, Lenovo stated it anticipates “the PC market will return to growth” in the 2nd half 2023.

The business published a profits decrease in the January to March quarter. Revenue in the quarter totaled up to $1263 billion, down 24% from a year earlier and marked the 3rd successive quarter of year-on-year decrease.

“Fiscal year Q4 was the most challenging quarter of the year given pressures from both the PC market and the global economy,” stated Lenovo in the profits report.

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But the CFO is positive that its non-PC services– gadgets, facilities options along with options & & services– can assist diversify business.

“Our revenue on a full year basis in fact didn’t actually drop that much because the other two business groups have been driving significant growth in part by the infrastructure business. The margin has also been mitigated or compensated by our significant growth in our services business,” stated Wong.

Lenovo’s non-PC services grew 7% and now include almost 40% of overall earnings for the complete year throughMarch The other 60% of earnings still originates from the PC company.

“Our non-PC businesses’ revenue mix increased to nearly 40%. Our clear strategy is working, and our operation is resilient, even in the face of global uncertainties,” stated Yuanqing Yang, chairman and CEO of Lenovo Group throughout the profits call. “Going forward, we will continue to buy [research and development] to record the next wave of development chances, so we are well gotten ready for the future.”

Pandemic boom

PC makers were a recipient of a pandemic-led boom that saw customers and companies buy laptop computers, tablets and note pads to shift from operating in workplace to remote work. But as employees went back to the workplace, PC deliveries fell.

Worldwide deliveries of desktops and laptop computers contracted about 30% to 56.9 million systems in the very first quarter of 2023 as compared to a year earlier, according to IDC information.

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Lenovo’s gadgets earnings decreased 33% year-to-year in the very first quarter.

But Wong is positive about expert system driving the company’s gadgets company. The velocity of digitization, AI and chatbots “actually require devices” to take advantage of them, Wong informed CNBC.

“Eventually we will have three major business growth driving the revenue rather than what we had in the past — just having PC as our primary driver. We will over time have three business groups driving profitability,” stated Wong.

Lenovo’s shares were down 1.8% in Thursday early morning trade.

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