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MANAGEMENT’S DISCUSSION & ANALYSIS
2010/11 Annual Report Lenovo Group Limited
16
BUSINESS REVIEW
During the fiscal year 2010/11, the worldwide PC market
continued to show relatively strong growth at the beginning of
the year, with the rate moderating towards the end. This trend
was due primarily to a tightening macro-economic environment,
as many countries sought to curb inflation especially in
emerging markets, as well as softening consumer PC demand
and the comparison to relatively high year-on-year growth rates
in certain markets.
The worldwide PC market showed diverse performance
between the commercial and consumer PC segments.
Momentum in commercial PC demand has gradually picked
up, benefiting from the corporate refreshment cycle, while
consumer PC demand weakened due to a worsening macro-
economic environment and increasing competition from
tablet products. Worldwide commercial PC unit shipments
grew by 8.8 percent year-on-year for the fiscal year, reversing
the declining trend since the financial crisis in the fiscal year
2008/09. Worldwide consumer PC unit shipments grew only
6.2 percent year-on-year, and this segment actually declined in
the fiscal quarter four. As a result, the overall worldwide PC unit
shipments grew 7.4 percent year-on-year.
Lenovo has continued to outperform the worldwide PC market
for the past eight consecutive quarters, through solid execution
of the successful “Protect and Attack” strategy. Balanced
growth across geographies, products and customer segments,
has enabled the Group to become the fastest growing PC
company among key players for six consecutive quarters.
Lenovo achieved double-digit market share in the first three
fiscal quarters and a 9.9 percent share in the fiscal quarter four,
according to industry estimates. The Group’s PC business
recorded 28.2 percent year-on-year unit shipments growth
for the fiscal year, which helped to bring Lenovo’s worldwide
PC market share to a historic high of 10.2 percent, a 1.7
percentage-point increase from a year ago. Lenovo was the
largest PC company in emerging markets including China; the
largest in worldwide education and government notebook PC
segment; and the second largest in the worldwide commercial
notebook PC segment.
The Group’s mobile business also performed well during the
fiscal year. The feature phone business showed strong unit
shipments growth of 40.3 percent year-on-year. The Group
also launched the LePhone smartphone in China in May 2010.
Overall, the Group’s mobile business unit shipments grew 47.4
percent year-on-year compared to its own performance in the
previous fiscal year. Its market share in China increased by 0.7
percentage-point year-on-year to 4.7 percent. Lenovo retained
its position as the number one domestic mobile handset brand
in the country, according to industry estimates. Late in the fiscal
year, the Group formed a new organization – Mobile Internet
and Digital Home (MIDH) Group – to coordinate its initiatives
in the mobile internet markets and better prepare itself to tap
growth opportunities. As a key first step, Lenovo launched its
first tablet PC, LePad, in China in March 2011.
Lenovo has continued to outperform the
worldwide PC market for the past eight
consecutive quarters, through solid
execution of the successful “Protect
and Attack” strategy.