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World’s top PC maker Lenovo increases profit 36% through smart phone move

Its  net profit rose by a better-than-expected level of 36 per cent in July-September, Lenovo said. adding that  it will continue to chase acquisitions while mining growth in the market for cloud computing and back-end information storage that's lured companies from rival IBM to Internet retailer Amazon.

Lenovo, with a 17.3 per cent share of worldwide PC shipments according to research firm IDC, reported net profit of $219.7 million for its fiscal second quarter, its highest for any quarter, extending its streak of more than three years of double-digit quarterly profit growth, the agency reports said.

Lenovo has been aggressively pushing into smartphones and servers as it seeks alternative channels of income to the shrinking PC market, which contracted 7.6 per cent in the quarter ended September, according to data from research firm IDC.

‘Given its strong financial position, Lenovo will continue to actively look for inorganic growth opportunities that would supplement its organic growth strategy and accelerate future expansion,’ Lenovo said in its earnings statement. The company also said it remains confident that the Chinese economy is recovering.

Lenovo Chief Executive Yang Yuanqing said it has not shied away from expressing eagerness to use the corporate server business as a way to bundle more PCs into packages it sells to customers.

The company has been successfully navigating a course away from PC manufacturing for years.

Revenue from mobile phone sales more than doubled in the first half of the fiscal year ending March 2014 compared with the same period in the previous year, the agency reports stated. Mobile phone sales accounted for 14 per cent of total revenue of $18.6 billion in the first half of the fiscal year ended September. For the year ending March 2010, that share of revenue was just 0.5 percent.

Lenovo was the fourth-largest smartphone vendor worldwide with a 4.7 percent share of a market that shipped over a quarter of a billion smartphones in the quarter ended September, according to IDC data.
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