If you ask just about anybody in the tech industry right now, they'll tell you that traditional PCs are in decline. While a small segment of the market gobbles up hardcore Windows gear for gaming, video editing, and other high-end tasks, people are increasingly turning to Chromebooks, Android tablets, and even their own smartphones for everyday computing and work tasks, and it's not hard to see why. These days, you can work from your smartphone, write reports for school, read books, browse almost every corner of the internet, and even get your game on. The same can be said of Android tablets, of course. Those with fast thumbs may not even need a Bluetooth keyboard to accomplish everything they need to do from their phone. At the same time, as phones get better and better each year and larger markets like the US and China become saturated, there are few markets left that could show any real growth, and the numbers say so; smartphone growth globally has stagnated, hitting only .03% this year.
It is in this market climate that Lenovo announces second quarter results for this year that are more than on par with analyst estimates, despite falling profits from the usual suspects. In an era where a high-end gaming PC from five years ago is still relevant and its owner can use an Android tablet or their phone from two years ago to beam into it and play their favorite games or perform hardcore computing tasks, Lenovo's sales in both the mobile and PC spaces are on the decline. Specifically, their PC sales went down 7% year-over-year, mobiles fell 6%, and their data center business caught a trivial 1% uptick.
Somehow, though, Lenovo managed to put up a somewhat impressive net profit growth of 64%, despite some difficulty integrating their acquisition of Motorola. The way they did it wasn't in the tech market per se, but in real estate. Lenovo sold one of their centers of operations in Beijing, and because of that, was able to throw down a decent second quarter. The company reported an operating profit of $245 million, but $120 million of that was from the sale of their Beijing operations. This means that, in the strictest sense, they missed their projected target in a big way, posting up $125 million against a target of $187 million. While this may paint a dismal picture, top dog Yang Yuanqing said that "we are on track to turn around the business,”.