Lenovo profit increased for the second consecutive quarter growth through artificial intelligence(AI). Over the three months to June, net profit at the company jumped 38 per cent year on year to$243m above analyst predictions. A 20% revenue growth to $15.45 billion, with a higher gearing of the business being driven by computing and infrastructure services. Announced by Lenovo in May, this new AI-powered PC comes with Microsoft Copilot software and a Qualcomm Snapdragon X-Elite processor. This resulted in continued product development, supported by supply chain constraints arising from the component shortage; however we do not sense disruption to new device introductions as yet. Supporting premium-to-market growth and strong average selling prices with AI adoption continues to make its intelligent devices segment sustainable.
Lenovo is rapidly broadening its revenue streams from personal computers (PCs) as the share of non-PC revenues increased by 5% to a historical high of 47% of total sales last quarter. A demand for AI infrastructure products brought in a surge of sales of infrastructure solutions business that surged by 65%, and also resulted in an improved supply of AI graphic processing units. Lenovo raised $2.0bn from one of Saudi Arabia’s sovereign wealth fund units and has since signed an agreement to build a hub to serve the region in May.
The reason the non-PC revenue accounted for 47% of the total revenue in 2014, up five percentage points from a year ago, is due to Lenovo’s strategic diversification efforts. The Intelligent Devices Group (IDG), Lenovo's core business segment, generated revenues of $11.4 billion, reflecting double-digit growth over the same period a year earlier. Lenovo maintained its number one position in the global PC market with a 23% share of shipments.
Lenovo continues to invest in innovation with R&D spending up by 6% YoY to $476m.Furthermore, the company is expanding its global reach through partnerships like the recently announced joint venture with Alat – PIF subsidiary. These deals will be beneficial for Group’s efforts of faster transformation process by enlarging their financial optionality and grabbing huge business momentum occurring in Middle East plus further diversify and strengthen supply chain footprint through new manufacturing hub in Middle East
