Lenovo’s reports strong sales gaining US market share
By Ramla Soni
15:26, 14 August 2020
Computer maker Lenovo reported strong sales and profit growth for the second quarter, gaining US market share despite the growing threat of sanctions on operating Chinese companies.
The group grew its US laptop and desktop computer market share to 16 per cent in the first half of the year, following only HP and Dell, according to IDC.
Customers including the US Air Force bought its laptops to help staff work from home. Unlike Huawei, which has seen its international business crippled, Lenovo’s international sales brought in 79 per cent of revenue in its last fiscal year.
But risks loom as the US election approaches and the Trump administration targets everything China-related, from lip-syncing apps to online messaging platforms. So far the Hong Kong-listed company, in which the Chinese government holds a stake, has stayed on the right side of US-China relations.
Lenovo reported $247m of profit as sales rose 7 per cent to $13.3bn for the quarter ended June 30.
But with tensions rising, some close to the company are worried that Lenovo may be targeted by the US as the “next Huawei”.
Lenovo has encountered years of suspicion in Washington, dating back to 2004 when the Chinese government held a much larger stake in the company and it acquired IBM’s PC division.
Some federal agencies have banned buying of its products, while others such as the US Department of Defense and state and local governments continue to make purchases.
Last year the Pentagon’s inspector general said Lenovo’s computers had known “cyber security risks” and disclosed $2m of purchases by the Army and Air Force in 2018, warning the department to take action.
However, as the coronavirus lockdowns hit the US this year, the Air Force bought Lenovo laptops. A federal procurement database shows about $400,000 worth of purchases this spring and summer.