Lenovo Beats Estimates, Raises Projections As PC Sales Recover

Lenovo, the world’s largest PC maker, reported earnings that beat analysts’ estimates and increased its worldwide sales projections for 2023, saying AI features would boost a nascent recovery of the market.

The company raised its predictions for global shipments next year into double-digit percentage growth from previous expectations of 5 percent to 10 percent, citing demand for PCs with specialised AI accelerator chips and a Windows 11-boosted replacement cycle.

Chairman and chief executive Yang Yuanqing told Reuters the company plans to further diversify its manufacturing base amidst potential new tariffs for China-manufactured goods under incoming US president Donald Trump.

The company already operates 30 factories in nine markets and plans to open facilities in Saudi Arabia following a major investment deal with the kingdom’s Public Investment Fund, Yang said.

PC recovery

The firm’s net income grew 44 percent to $358.5 million (£284.4m) in the quarter ending in September, Lenovo said in a filing, compared with average estimates of $343.3m.

Revenue rose 24 percent year-on-year to $17.85bn, beating analysts’ expectations.

Lenovo’s PC shipments for the quarter grew 3 percent year-on-year amidst declines by competitors such as Dell and Apple, IDC said.

Lenovo maintained its 24 percent market share for the period as global PC shipments declined 2.4 percent year-on-year, according to IDC.

The analyst firm attributed the dip to a seasonal sales pause ahead of the Christmas shopping season.

Lenovo said its sales increase was partly due to demand for AI-enabled PCs, which use specialised processors to boost the efficiency of AI workloads.

AI PCs

AI has been consistently in the spotlight since the launch of OpenAI’s ChatGPT two years ago, with Microsoft launching its own Copilot based on OpenAI’s technology.

Microsoft has been heavily promoting AI capabilities in recent months and this year added a Copilot button to its flagship keyboard line.

Lenovo launched its first AI PCs in China in May and brought them out worldwide in September.

The company said it expects AI PCs to make up 25 percent of its shipments by next year and up to 80 percent by 2027.