Day: February 20, 2019

HONG KONG (Reuters) – Chinese PC maker Lenovo Group Ltd said on Thursday it swung to a net profit in the three months through December, beating market expectations, due to strong performance across its major business groups.

Profit for the quarter reached $233 million, versus a loss of $289 million in the same period a year earlier when the world’s largest personal computer (PC) maker by shipments took a one-off hit due to U.S. tax reform.

The result was ahead of the $207 million average of 10 analyst estimates compiled by Refinitiv.

Revenue rose 8.5 percent to $14.04 billion, the highest in four years and in line with analyst estimates.

Lenovo’s mobile phone business also recorded a pre-tax profit – of $3 million – for the first time since it bought Motorola in 2014 for $2.9 billion. Revenue nevertheless declined 20 percent, with Lenovo attributing the fall to a strategy of focusing on core markets.

The firm said revenue in its PC and smart devices business rose 12 percent, and that its global PC market share was 24.6 percent.

Industry tracker Gartner last month said worldwide PC shipments fell 4.3 percent in the December quarter and 1.3 percent in 2018, but that the biggest three vendors – Lenovo, HP Inc and Dell Inc – expanded their market share in the quarter to 63 percent of total shipments from 59 percent.

Loss in Lenovo’s data center business narrowed to $55 million from $86 million a year earlier, while revenue grew 31 percent.

Lenovo, which bought IBM Corp’s personal computer and server businesses, is dual-headquartered in Beijing in China and North Carolina in the United States, with manufacturing in both countries.

It said in its earnings statement that it was “well prepared for geographic political and macroeconomic volatility” with its worldwide manufacturing capabilities.

(Reuters) – Samsung Electronics Co Ltd has wowed the smartphone industry with the first mainstream foldable screen, accompanied by a nearly $2,000 price tag that generated heated debate as to whether it may prove too expensive to revive slumping sales.

The South Korean tech giant unveiled the Galaxy Fold which resembles a conventional smartphone, but which opens like a book to reveal a second display the size of a small tablet at 18.5 cm (7.3 inches). It will go on sale on April 26.

At its launch event in San Francisco on Wednesday, Samsung upped the surprise factor by briefing analysts and journalists on widely anticipated aspects ahead of time, such as 5G versions of its existing top-end Galaxy S phones.

The unveiling of the foldable device came as a shock to many in the auditorium.

“I am blown away,” said Patrick Moorhead of Moor Insights & Strategy, adding the phone could help Samsung rejuvenate its mobile business, whose lead is under attack from China’s Huawei Technologies Co Ltd.

“I believe you can innovate your way out of a mature market,” he said, noting that when Apple Inc launched the iPhone in 2007, most industry watchers believed the market had matured for $100 “candy bar” phones without touch screens.

Bob O’Donnell of TECHanalysis Research said the work Samsung had done with Facebook Inc, Alphabet Inc’s Google and Microsoft Corp to adapt applications to the new screen was important.

He said though Samsung had teased the folding phone before, “to see it in action, to see the software – I was like, Wow. It’s hugely important that the software experience be good.”

The phone, which can operate three apps simultaneously and boasts six cameras, also challenges the notion of what a phone can cost, debuting at nearly twice the price of current top-of-the-line models from Apple and Samsung itself.

“Due to price, it’s likely to be sold mainly to early adopters. Prices are key to expanding sales,” said former Samsung mobile executive Kim Yong-serk, who is now a professor at Sungkyunkwan University in Korea.

“It will help Samsung burnish an image as an innovative company, but it is unlikely to be profitable. I expect Apple to wait say for one year and come up with foldable phones with more features, as they did with the smartwatch,” he said.

Brokerage Hana Investment & Securities expects Samsung to sell 2 million foldable phones this year, with the price keeping the volume relatively low, while another brokerage expects shipments to reach 1 million. That would be less than one percent of the 291 million smartphones Samsung sold last year.

Online, social media users were divided over the price, the features, and whether consumers would even need such a phone.

“Innovative? Sure. Needed? Not sure. 6 cameras, 2 screens and 2 batteries at $1980?!?,” wrote Twitter user @JackPhan.

Reddit user AmazedCoder took a more positive view.

“The fact that people are only complaining about the price should tell you that a lot of people actually want this, but can’t get it. Second gen of this thing is gonna sell like hotcakes.”

While most analysts expect Apple to wait until 2020 to match the foldable phone, Samsung has set new price standards in the premium category as it seeks to revive consumer interest in an industry which posted its first-ever sales decline last year.

“$1980 dollar for a #galaxyfold no thanks… watch…now the next iPhone will be $1999,” Twitter user @zollotech said.