The trend towards IT services is clear in the technology sector and proof of this are Lenovo’s latest results. The company has presented income of 12,900 million dollars with net benefits of 191 million dollars, where IT services are the main protagonists.
Revenues from the non-PC business accounted for 41% of the Group’s total, and the service-led business posted strong growth and sustained profitability. Specifically, the solutions and services division grew 18% with revenues of $1.7 billion and an operating margin of more than 21%.
Lenovo perceives signs of stabilization and commitment to AI and services
Despite the challenges posed by the market during the last quarter and the unfavorable macroeconomic conditions, Lenovo sees signs that the market is stabilizing and improving, that component prices are bottoming out, and believes that the market for client will recover and return to the path of growth during the second half of this fiscal year.
According to the President and CEO, Yuanqing Yang:
“Last quarter, the macroeconomic environment was challenging and our hardware business remained in a phase of adjustment, but we have persisted in executing on our strategy. Our services-led business has posted strong growth and sustained profitability. The revenue mix from non-PC businesses increased from last year, demonstrating the effectiveness of our diversified growth drivers, and I am therefore cautiously optimistic.”
Lenovo remains committed to doubling investment in innovation over the medium term, including an additional $1 billion investment over the next three years to accelerate the deployment of artificial intelligence (AI) for businesses around the world, specifically in devices, infrastructure and AI solutions.
The opportunities ahead
The company sees great opportunities in the next three years. The trend of digital and intelligent transformation will continue to drive a robust increase in global IT spending, especially IT services. At the same time, strong growth in demand for vertical solutions, including smart cities, smart manufacturing, smart education, and smart commerce, is anticipated through 2026.
In the infrastructure area, services will also boost demand, with its strategy focused on IaaS, as well as Edge technology and business software with a clear integration of AI in all solutions to improve performance and functionality.
Devices, Lenovo’s most touched business with a 28% drop in revenue from the previous quarter, also has new opportunities. The space open to new devices AI and collaboration and smart home are niches with potential.
