Excellent Results of Lenovo on the Croatian and Regional Markets
Regionally speaking, Central and Eastern Europe is not an exception concerning global trends, Ivan Bozev, Lenovo ED & GM Central& South East Europe, pointed out in an interview with ICTbusiness.info.
According to him, the results of IDC for the second quarter of the financial year 2022/2023 speak in support of this. For Croatia, Bozev points out that Lenovo has a great performance in the personal computer market and is the leader with a market share of 26.8 percent according to IDC for the second quarter of the financial year 2022/2023.
After years of growth, the market is slowing down, but Lenovo is still the world leader. What is the situation in our region?
Looking retrospectively and forward, the uncertainties across many industries around the world continued to create disruptions; however, Lenovo has proven during the 10th consecutive quarter to deliver solid results through its growth engines with both solutions and services business, as well as the infrastructure business.
At a WW level, Lenovo registered in the second quarter of its fiscal year, a net income that grew 6% year-on-year to US$541 million, and Group revenue grew to USD$17.1 billion, up 3% year-on-year in constant currency.
All main businesses contributed positive operating profit, demonstrating further progress toward the Group’s goals of doubling profitability in the medium term. Additionally, the diversified growth engines continued to drive strong performance with both solutions and services business, as well as the infrastructure business, seeing high double-digit year-on-year growth.
These results as well as the past 3 years have demonstrated that the combination of Lenovo’s strategy, strong execution, and resilient operations are enabling it to transcend the industry cycle. This, combined with a high-quality and innovative portfolio, unique hybrid manufacturing and supply chain, global/local principles, and capability, is supported and will do in the future to drive further opportunities to deliver sustainable growth and improve profitability.
While the market size of PC and tablets declined in the short term, due to the macroeconomic environment, long-term it is still expected to remain higher than pre-pandemic levels. Alongside PCs, the scenario-based solutions market will continue to grow as Lenovo expands from smart devices to smart spaces.
Regionally speaking, Central& Southeast Europe does not make an exception from the global trends, though we registered a performance of 21.4% market share, according to IDC Q2FY2223, being the number 1 PC in the region. In Croatia, specifically, Lenovo has a great performance in the PC market, being the number one with a market share of 26.8% according to IDC Q2 FY2223.
Which segments are growing the most and why?
We are proud to say that our IDG business vertical maintained industry-leading profitability of 7.4%, driven by operational excellence and consistent investment in innovations, particularly in the high-end premium segments. In the IDG business, we outperformed our key competitors and strengthened our global position as the #1 PC company in the world, and in Croatia too, as I mentioned above.
The smartphone business continued to grow considerably, proof of that point is the rich portfolio of innovative new products; in addition, the Smart Collaboration business continues to grow, as well as the Gaming segment, where we placed our bets too, delivering an enhanced gaming experience to our users. Additionally, the breakthrough year continues with growth in servers, storage, and services expected over the next 3 years. We foresee high growth in the edge infrastructure and storage market. We are confident to see how the enterprise business is steadily growing, and we are ready to accelerate this business for the corporation at a global level. In this sense, we’re going to continue investing in innovation, particularly Edge and Services, and strengthening our operational resilience, as we ramped up new factories in China, Hungary, and Mexico. In other words, we’re going to focus on being one of the fastest growing and ultimately the largest infrastructure solutions providers in the world, with a sustainable profitable business model.
What are the expectations for the end of 2022, because that is the period of greatest growth for both the user segment and the company?
Looking at our business verticals, IDG- Intelligent Device Group- continues to focus on innovation to drive the extension from smart devices to smart spaces and we’re confident that success in the PC market can be replicated to grow the business beyond PC and win more markets, more specifically the smartphone space. Speaking about smartphones, this business vertical continues to enrich its portfolio and achieve hyper-growth in expansion markets.
Also, we see an opportunity to grow in the SSG segment (Solutions and Services Group), where we’re aiming to continue to build comprehensive horizontal solutions for vertical industries, for example, SSG’s Digital Store solution embedded with Lenovo AI Edge Server that is powering now one of the world’s largest food retailers to reduce over 75% of its self-checkout errors without the need for employee intervention. And last but not least, the server market will continue to grow and represent an important growth element, since by 2025, the server market alone is expected to reach US$134 billion, and in this sense Lenovo’s server division continues to enhance its comprehensive infrastructure portfolio and invest in innovation, particularly in Edge and Services and we’re committed to being our customers’ most trusted partner, continuing to deliver the highest level of customer satisfaction, and doing all of this with industry-leading sustainability for the environment.
What can be expected in 2023?
We foresee some global trends to continue in 2023, such as digitalization and hybrid work to accelerate and drive long-term opportunities such as a demand for premium devices for audio/video/connectivity. These trends will be built on the foundation of New IT- client, edge, cloud, network, and intelligence. With our clear strategy and consistent execution, Lenovo has built complete and comprehensive capabilities that cover all elements of the New IT infrastructure. Based on global activation data (versus shipment data) we are seeing true demand is better than expected and something we can expect to stabilize in the next year. In addition, we’re confident that our products, solutions, and services will continue to unveil new conceptions, solutions, and emerging innovations that will define the way we work, learn and engage in the digital world. Furthermore, our enterprise business will continue to capture the significant growth opportunity in the market. In Q2 FY2223, we delivered the 4thconsecutive quarter of profitability globally,
When we talk about technology, what is the thing that users in our segments expect the most?
When we think about technology, we believe that today we need it to be more intelligent, more connected, and more sustainable than ever before- technology that can truly transform what is possible in homes, businesses, and cities across the globe. That means blurring the lines between the physical and the virtual, bringing raw computing power to every aspect of our lives, and putting comprehensive solutions and services first.
We are confident that this is what our customers are looking for too, premium quality, reliability, and technology that helps them to do a better job.
In many ways, the less 'visible' we are as a technology solution the better we're serving the needs of our customers. The easier it is for them to achieve their goals, the better for both us and our customers. It is why our service offering is growing rapidly - it adjusts to customer requirements and adapts as those requirements change.
Analysts estimate that the market will reverse the negative trend from this year, what are the expectations for Lenovo, especially in our region?
Looking ahead it’s clear external challenges will persist for a while. While the global economy, pandemic, and geopolitical tensions continue to create uncertainties across many industries around the world, Lenovo has proven it can navigate challenging times, at the same time outperform the competition and market expectations.
We are confident for the next year, that our strategy, strong execution, and resilient operations to fulfill our commitments and transcend the cycle, will support us in delivering the best products and experiences for our consumers, and to maintain a profitable business.
In Central& South East Europe, we continue to innovate through our business approaches, relying on our talented teams that can support a sustainable business. On this occasion, I would like to take the opportunity to thank all our business partners and customers from our region, and in particular from Croatia,
that continued to trust our products and our business practices, to deliver the best possible customer service and experience. Lenovo will continue innovating for companies of all sizes and enabling the transformation of entire industries, from retail to manufacturing, finance, healthcare, telecom, and more.