Lenovo marks slowest growth in six quarters
Lenovo Group said the era of “hypergrowth” is over in China’s smartphone market after the company reported its slowest sales growth in six quarters.
Shares fell to their lowest since June 24 after Lenovo’s revenue rose 7.2 percent in the three months ended September, the smallest increase since March 2013 and missing analysts’ estimates. Lenovo was the biggest decliner yesterday on Hong Kong’s benchmark Hang Seng Index.
Chief Executive Officer Yang Yuanqing has expanded in computer servers and mobile phones, including the $2.91 billion purchase of Motorola Mobility, to help combat a shrinking personal-computer market.
Growth in China is slowing amid intensifying competition from local smartphone producers, including Xiaomi, which surpassed Lenovo and became the third-biggest global vendor in the quarter ending in September.
“The industry is changing from in the past, when China grew much faster than the rest of the world,” Yang said in an interview. “The market is changing and China will not see further hypergrowth.”
Lenovo shares fell 4.8 percent to $10.26 Hong Kong dollars ($1.32) at the close of trade in Hong Kong, adding to a 5.1 percent drop on Thursday that was the biggest decline since Feb. 4.
Chinese producers have packed high-end features into cheaper smartphones to drive growth. Lenovo boosted global smartphone shipments by 38 percent in the quarter to 16.9 million units, ranking it fourth behind Samsung Electronics, Apple and Xiaomi, researcher International Data said Oct. 29. Bloomberg
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