Lenovo Yoga tablet
Lenovo’s net income reached $253 million on revenue of $14.1 billion in its third fiscal quarter. Profit was adversely affected by M&A-related charges in 2014.
Lenovo bought the x86 server business from IBM for $2.1 billion and Motorola Mobility’s mobile handset business for $2.91 billion from Google in 2014. In 2005, Lenovo acquired IBM’s PC business.
At the end of 2014, Lenovo had cash reserves of $1.3 billion, 30 years after its founding as Legend in Beijing in 1984.
Lenovo derives 65% of its revenue now from PCs, 24% from mobile products and 9% from enterprise offerings. A year ago, PCs accounted for 81% of Lenovo’s sales. The company holds a 20% share of the global PC market.
In the third quarter, Lenovo’s global PC and tablet sales reached $9.2 billion, generating a pre-tax profit of $494 million.
Lenovo for the third quarter reported that the ThinkServer brand and the System x business unit sales reached $1.2 billion. The System x unit accounted for $986 million. Lenovo, like IBM before it, still lost money ($42 million) for the quarter on servers, but claims to be the third-largest provider of servers with a 10% market share.
Unlike many of its major rivals, Lenovo has only one channel program covering tablets, PCs and servers. Lenovo’s channel group for the Americas now accounts for 30% of the company’s revenue.
Lenovo’s Kickstart program allows service providers to defer payments for up to 120 days, while its Rent and Grow program mirrors IT payments to usage. A Trade-In program for eligible products is also available to assist in recovering capital from currently installed assets.
Under the terms of the deal with IBM, Lenovo resells IBM storage offerings but also has a joint venture addressing storage products with EMC.
Lenovo will soon add 25 new services to its TopSeller Guide to complement TopSeller System x hardware, which will allow partners to sell complete solutions that maximize uptime and reduce long-term cost of ownership.