Lenovo today released its financial results for its fiscal second quarter 2020, equivalent to the months from July to September, and recorded a record turnover , worldwide, of 14, 5 m billions of dollars, with an increase of 7% compared to the same period of 2019. Net profit also hit the all-time record with 310 million dollars, up of 53% year over year.

All of Lenovo’s divisions contributed to these outstanding achievements worldwide: the Data Center Group (DCG) increased by 11% on an annual basis amounting to 1, 48 billions of dollars; the Mobile Business Group (MBG) showed a turnover growth of 39%. Among all, however, the result of PC and Smart Devices (PCSD) stands out, which together with MBG makes up the Intelligent Devices Group (IDG), which with 11, $ 5 billion in revenue has put Lenovo back on the top step of the PC market at world. Very significant is the fact that, for the first time in history, in the second fiscal quarter Lenovo reached the first position in the sale of PCs also in Italy, as Emanuele Baldi told us , CEO of Lenovo Italy, in a call to comment on the global results.

Lenovo number one in the world and in Italy in the PC market

Commenting on the remarkable results obtained by PCSD worldwide, in addition to the already mentioned 01, $ 5 billion in revenue, Lenovo achieved 723 million dollars of pre-tax profit, an increase of 18% on an annual basis and the industry-leading profit margin with 6.3%, Emanuele Baldi stressed that at this moment the PC market is under two conflicting forces. On the one hand there is a strong increase in demand , largely linked to the health emergency that has forced companies and individuals to work and study differently. We have gone from a PC for each house to a PC for each person, confirming the fact that the PC has returned to being an essential device, not a replacement but complementary to the smartphone. This passage, partly traumatic depending on the contingent situation, prompted individuals to immediately buy the PC they could afford according to their financial resources, without evaluating which device was actually the best for their needs. As a result, there has been a sharp increase in the low-end PCs , normally quoted by manufacturers, as in margins are very low in this market segment.

The second force that is acting on the market at this stage is the strong pressure that the entire production chain is having to meet the demand. The health emergency has created significant supply problems , especially with regard to displays. Emanuele Baldi explained how Lenovo was able to cope with these supply problems thanks to the presence of production sites in all parts of the world and therefore being able to divide the production according to where the conditions allowed.

Baldi he also stressed that Lenovo has not “exploited” this dynamic between increasing demand and contraction of supply to obtain greater margins, but has maintained the same margins, to support the market in this difficult phase and with the utmost respect for customer needs. Citing the IDC data, as Lenovo has not always communicated the results of individual countries, Baldi was particularly keen to underline how for the first time Lenovo has the first position in the sale of PCs in Italy , moreover both in the consumer and business sectors. This result was also achieved thanks to a far-sighted procurement strategy started already in the first quarter (solar) which made it possible to have sufficient products to meet the needs of the market.

In perspective Baldi sees a consolidation of the trends we are witnessing in this phase, with a customer base that has grown a lot, depending on the transition from 1 PC per home to 1 PC per person, but which will have to settle down and move on to find the right PC based on to specific needs. In this context, is fundamental innovation which will bring not only new form factors, but also great innovations in what’s inside the PC, such as a strong focus on all aspects of security, which has become even more important now that you work everywhere, on the integration between PC and smartphone and on Artificial Intelligence, which allows you to enable new scenarios and makes it necessary to have more and more processing power.

The cloud drives the growth of the Lenovo Data Center Group and continues the path of the Mobile Business Group

Alessandro de Bartolo , Country Manager Data Center Group, confirmed that Lenovo achieved remarkable results in the data center in the second fiscal quarter, primarily thanks to the Cloud Service Provider segment, which grew by 34% precisely according to de the investments that hyperscalers have made to upgrade their infrastructure in the period of health emergency. At the same time, companies have been more cautious on the investment front, but in any case Lenovo has grown more than the market in this specific sector. In perspective, the recent announcement of the partnership with SAP is very relevant for de Bartolo which will bring on-premise the SAP HANA Enterprise Cloud , relying on the Lenovo TruScale solution.

Carlo Barlocco , Executive Director Mobile Business Group Europe Expansion, reiterated how the new smartphone strategy is achieving the expected results. In particular in Italy there has been a very strong growth , even if it started from relatively small numbers, and Agreements have been activated with all retailers and operators. As part of the restructuring of the structures in the various European countries, in order to better implement the new strategy, to England and Poland that started from consolidated market shares, after having created a new team for Italy, now also Germany, France and Switzerland are aligned with the new strategy. On the products side, the focus is on the democratization of 5G , today present on Motorola products in the price range of 299 € and which will also arrive on lower priced products.