PC maker Lenovo is finally back growing sales having overnight announced their first revenue gain since 2022.
The business is also tipping growth in 2024 amid rising enthusiasm for artificial intelligence-powered PC and servers.
Revenue in the last quarter of 2023 rose 3% from a year earlier toUS $15.72 billion, the world’s largest PC maker reported.
The revenue growth is “a turning point” for Lenovo, Chairman and Chief Executive Yuanqing Yang said.
He is also confident the momentum will continue.
Net profit fell 23% to US$337 million from US$437 million in the period as rampant discounting during the Black Friday period took its toll.
Lenovo said that in the long term, it expects the global PC sector to recover to a level structurally higher than in the prepandemic period.
What did come out of the briefing was that Lenovo plans to release its first PC with artificial intelligence features by midyear.
Luca Rossi, Lenovo’s executive vice president said, “we are starting to ship the first generation of AI PC devices in the first half of 2024.”
Chairman and CEO Yang Yuanqing called the new model a “personal intelligent agent, using natural language user-interface and compressed local large language model.”
The device will come with a “rich AI application ecosystem,” Yang added.
The intelligent device group, which covers PCs, tablets, smartphones and other devices, generates about 80% of the company’s revenue.
Also on the cards is a significant expansion of AI products in the second half and into 2025.
During the last quarter, Lenovo was able to maintain a lead over its main rivals, such as HP and Dell Technologies, by shipping 59 million PCs last year, despite sales volumes falling by 13%.
Now with AI coming into play Lenovo is punting that they have not only the technology capability but are able to deliver the right products for businesses and for CE retailers new PC’s that will drive a sales uplift.
“We believe this trend will stimulate another industry refresh cycle, as users require devices designed for more creativity and productivity,” Yang said.
Ryan Reith, group vice president at IDC’s Mobility and Consumer Device Trackers, also sees reason for hope.
Lenovo
“While the market was down again in 2023 in terms of shipments, there is a lot of positive momentum for PCs looking forward,” Reith said, with AI PCs being just part of the reason.
“While AI has clearly captured everyone’s attention, it shouldn’t be overlooked that 2024 is expected to be a strong year for commercial PC refresh, and the advancements around gaming PCs continue to drive market excitement,” he said.
Canalys, a tech market analysis firm, predicted in a recent report that the AI PC market is “set for substantial growth” starting next year. Yang referred to this projection during Thursday’s earnings call, noting that AI PCs are expected to exceed 175 million units, constituting over 60% of the total PC shipments, by 2027.
But they appear unlikely to be an immediate game-changer for Lenovo. Rossi said AI PC’s contribution to 2024 shipments “will not be significant.”
