Lenovo’s basement full of accountants has released the company’s financial report for the last 12 months, and it’s all smiles and dollar signs. After all, it increased the cash coming in through the front door, spent big to buy buy Motorola and IBM’s server business and still made a $100 million quarterly profit. Even better, the outfit has now been the world’s largest PC maker for two straight years, selling 60 million computers in the last 12 months alone.
As TechCrunch reports, there are, however, some murky clouds that are gathering on the horizon. Lenovo itself attributes the diminished profits to merger costs and exchange-rate hiccups, but the company’s profits also dipped in 2014. Part of this is because the PC market is beginning to shrink as users switch to smartphones and tablets and businesses stop upgrading their machines beyond Windows XP.
Lenovo’s trying to make hay while the sun shines, using its cash reserves to boost its phone and server businesses and move beyond PCs. Instead, it’s aiming to become a “hardware and software services” firm, ironically mirroring a similar move that IBM made when it sold its PC businesses to Lenovo in the first place. Although, we imagine, that with the tighter margins and fiercer competition between phone makers, we could see those profit figures fall a little further yet.
[Image Credit: AFP/Getty]
Source: Lenovo (Businesswire)