Lenovo handsets outsell PCs in Q2

Lenovo Group Ltd sold more cell phones than PCs in the second quarter of 2012, doing so for the first time in a quarterly period, the company said on Thursday.

Lenovo reported that it sold 6.8 million cell phones during the quarter, which ended on June 30.

Meanwhile, the company saw its share of the global PC market approach that of Hewlett-Packard Corp, a US-based computer manufacturer.

The difference in the two companies' market shares fell to 0.7 percentage points in the second quarter of the year, a result in part of the Chinese company's increasing its market share to a record high of 15 percent during the period.

In 2010, the difference in the companies' market shares amounted to 9 percentage points, according to the US-based IT research company International Data Corp.

Altogether, Lenovo said it had $8 billion worth of sales during the second quarter of 2012, which it counts as the first quarter in its fiscal calendar.

The company attributed its performance to a sharp increase in its sales of mobile Internet devices and its success in emerging markets.

The company said its revenue from sales of mobile Internet devices, especially smartphones, increased by 173 percent year-on-year to $587 million between April and June.

"We saw strong progress in our mobile Internet business," said Yang Yuanqing, Lenovo chairman and CEO.

"From April to June, Lenovo sold more than 5 million smartphones in the Chinese market."

According to the IT research company Analysys International, Samsung held the largest share of that market in the second quarter.

Liu Jun, Lenovo senior vice-president and president of the company's mobile Internet and digital home business group, said Lenovo's share of the smartphone market had increased from about 2 percent at the beginning of 2011 to 13 percent in July this year.

He said the company will introduce more than 40 new smartphones to the Chinese market by the end of this year.

Liu said Lenovo will next try to boost its smartphone sales by entering India, Russia, Vietnam and other overseas markets.

In the second quarter, Lenovo derived about 16 percent of its sales revenue in China, as well as 7 percent of its global sales revenue, from sales of mobile Internet products.

Another cause of Lenovo's sales increase has been its strong performance in China, India and other emerging markets.

Even though the Chinese economy is slowing and fewer PCs are being sold in that market, Yang said the country's continued urbanization makes him optimistic about the industry's prospects.

"About 50 percent of the Chinese population still lives in rural areas and PCs are still far less prevalent in China than in developed economies, such as the United States," Yang said.

"We predicted that May would be the low point for China's PC market expansion this year," said Kitty Fok, vice-president of IDC Asia-Pacific. "In the third quarter, the market will show signs of revival."

tuoyannan@chinadaily.com.cn

(China Daily 08/17/2012 page15)