Lenovo profits drop as its smartphone shipments overtake PCs for the first time ever



Lenovo has announced its end of 2014 financials and they are indicative of the highs and lows of the tech industry as a whole. The major takeaways are that Lenovo is increasingly looking to its smartphone business to salvage the slump in demand for PCs.

Lenovo acquired Motorola from Google last year for $2.91 billion. That investment seems to be paying off early as Motorola managed to ship 7.8 million smartphones that increased the number of total smartphone shipments by Lenovo by 16 million to have the overall 2014 shipment figures stand at 76 million. 76 million smartphone units shipped in a year is Lenovo’s best ever and with the company starting an aggressive push into the African market with low cost and mid-range smartphones, that number is expected to rise exponentially.

While it was an upward trajectory for its smartphone business, PC sales didn’t soar as high. They never slumped either as is the case with Lenovo’s rivals in the business. Lenovo has been seeking to increase its PC sales by pushing its devices to enterprises globally as well as customers. It managed to ship 60 million PC units last year. Compared to the 76 million smartphones, it is the first time in the company’s history that its PC sales are playing second fiddle. It managed to increase its PC sales to enterprises by 3% and its PC business was profitable in all the continents despite a general decline trend in the PC market over the last few years. It now accounts for a fifth of the PC market.

2014/15 FY revenues stand at $46.3 billion which represents a 20% increase. In Q4 those figures stood at $11.3 billion, a 21% rise. However, the company’s annual profits stood at $829 million which is a slump from the $5 billion it made in the past financial year.