Lenovo has reported solid revenue growth of 17.9% YoY for 2021-22 (Lenovo’s financial year starts in April). But Q4 2021-22 (January-March) saw its revenue falling 17.1% QoQ and rising 6.8% YoY.
In April 2021, Lenovo adopted a new organizational structure under its ‘3S strategy’. In the new structure, it has three major business groups — Intelligent Device Group (IDG), Infrastructure Solutions Group (ISG) and Solutions & Services Group (SSG). Lenovo’s latest financial numbers indicate the ‘3S strategy’ is working to re-energize this giant enterprise.
IDG is still taking the biggest share of Lenovo’s global revenues. The three business groups – IDG, ISG and SSG – saw acceptable YoY increases in the last financial year, at 17.5%, 13.3% and 29.8% respectively.
Commenting on IDG, Senior Research Analyst Ivan Lam said, “Lenovo has made constructive progress in its PC and tablet business, but its smartphone business has seen a phenomenal bounce.”
According to Counterpoint Research’s Global Smartphone Market Monitor, Lenovo achieved a 53.2% YoY smartphone shipment increase in CY 2021 by units. In terms of Lenovo’s financial year, its smartphone shipments grew 33.5% YoY in 2021-22.
Lam added, “Motorola contributed to Lenovo’s smartphone growth. LG’s exit from the smartphone business gave Motorola a great chance to improve performance in the North America and LATAM markets. With its good fusion of hardware specifications and fair pricing, Motorola broke through the market. In the mid-range of smartphones in LATAM markets, Motorola‘s devices have higher-pixel main cameras and bigger ROM, making them attractive for LATAM consumers.”
Based on Counterpoint Research’s Smartphone Market Monitor data, Lenovo’s smartphone shipments in North America and LATAM took up 79% of its total sales in Q1 CY2022.
According to Counterpoint Research’s Global PC and Tablet Monitors, Lenovo’s PC and tablet shipments decreased 9.5% and 20.2% respectively in Q1 CY2022. Lenovo continued its leadership in the PC market, shipping 18 million units in the quarter to grab a 23.1% market share. The 9.5% YoY decline in PC shipments was mainly due to component shortages and a relatively high base in Q1 CY2021.
Commenting on Lenovo’s PC performance, Research Analyst William Li said, “Lenovo’s PC business is one of the biggest beneficiaries of hybrid working environments. However, global inflation and regional conflict brought uncertainties to PC demand, and the order visibility and outlook are not as good as they should be at the beginning of the year. In addition, consumer demand has largely slowed down since H2 CY2021, while commercial demand remains strong and could be the key support for PC shipments in CY2022.”
During its earnings call, Lenovo mentioned that the group would continue to invest in new innovative and advanced products, which is reflected in its latest interest in XR and the Metaverse. Also, Lenovo chairman and CEO Yang Yuanqing highlighted that the group faced challenges from the supply chain and macroeconomic environment.