The COVID-19 pandemic will boost long-term growth opportunities for personal computers (PC) and smart devices, as working and learning from home has become much more common since the coronavirus outbreak, Chinese-mainland tech heavyweight Lenovo Group said on Wednesday.
The world’s largest PC maker is seeing increasing demand for remote work, e-commerce and online gaming, which could help boost markets for PCs and tablets, Chairman and Chief Executive Officer Yang Yuanqing told China Daily.
The world’s largest PC maker is seeing increasing demand for remote work, e-commerce and online gaming, which could help boost markets for PCs and tablets
Yang Yuanqing, Chairman and Chief Executive Officer
He believes this trend will also lead to growth in demand for supporting data centers and infrastructure to power faster networks and digital consumption.
Yang said everyone is likely to own one PC in future, so the market size could expand 25 percent to 30 percent in the next two or three years.
PCs and smart devices accounted for almost 80 percent of the company's revenue of US$50.7 billion (HK$392.5 billion) for the fiscal year ending March 31. Despite strong demand, sales in this sector dropped 4.4 percent to US$8.5 billion in the first three months of the year, compared with the same period a year before.
The Hong Kong-listed company attributed the supply shortfall in most of the first quarter to the coronavirus outbreak. Yang said all factories on the mainland had to close for several weeks from January to March.
Mobile business was hit hardest by the pandemic - as the company’s primary global smartphone factory in Wuhan shut down for much of the quarter. The company had to leverage its plants in India and Brazil and produced 6 million phones during the quarter.
The mobile sector recorded a 19.2 percent decline to US$5.2 billion in revenue for fiscal year 2019/20, among which 58 percent of the annual decrease was from the supply shortfall in the fourth quarter. The losses before taxation from its mobile business was US$60 million in the fourth quarter - while for the full year it was US$43 million. The sector was profitable for fiscal year 2018/19.
The company’s factories on the mainland have fully resumed production and supply conditions have stabilized from the beginning of April. But it still has some problems supplying components.
Lenovo reported a 64 percent year-on-year drop in net profit for the first three months of the year, while revenue in the period fell 10 percent to US$10.6 billion.
