Sina Technologies News Nov. 9 noon news, Lenovo Group recently released the second quarter of fiscal year 2018/19 performance report. According to the report, the group's revenue in the current quarter was 13.38 billion US dollars, an increase of 14% compared with the same period last year, and the company's pre-tax profit in the second quarter reached 213 million US dollars, an increase of 178 million US dollars compared with the same period last year, an increase of about six times. During the reporting period, Lenovo shareholders should increase their profits to $168 million, an increase of $91 million annually and $29 million annually.
Combined with historical data, Lenovo has achieved double-digit revenue growth for three consecutive quarters, and reached its highest quarterly revenue level in four years in the current fiscal quarter.
On the day of the announcement, Lenovo communicated with Sina Technologies and other media in Lenovo Group's headquarters in Beijing. Lenovo Group Chairman and CEO Yang Yuanqing, Lenovo Group President and Chief Operating Officer Ranch, Lenovo Group Executive Vice President familiar with Finance Officer Huang Weiming, Lenovo Group Executive Vice President and President of China Liu Jun, Lenovo Group Senior Vice President, Data Center Business Group President Tong Fuyao, Lenovo Group Senior Vice President Qiao Jian, chief executive of the global strategic market, attended the meeting to explain the results.
At the communication meeting, Yang Yuanqing said that Lenovo's three core businesses have achieved very strong growth and improved profits.
Lenovo Intelligent Equipment Group reported revenue of $118.44 billion in the quarter, up more than 10% year-on-year, mainly from PC and smart equipment business. The business contributed $10.2 billion in revenue in the second quarter, up 18% year-on-year, and for the first time, the related business earned more than $10 billion in quarterly revenue. The growth rate of PC business has reached more than 20%.
At the same time, Lenovo also disclosed in the official foreign news that Motorola has achieved a business break-even in the world. Yang Yuanqing further introduced at the media communication meeting that, for the first time outside China, related businesses have achieved positive profits.
Yang Yuanqing said that Lenovo's mobile business has been greatly improved since the implementation of the focus strategy. Motorola's business outside China has been profitable for the first time in quarterly data.
In addition, Yang Yuanqing said that Lenovo Data Center Business Group has maintained rapid growth in driving cloud computing, edge computing and traditional IT development for five consecutive quarters. In the second quarter of this fiscal year, data center business grew by more than 58% over the same period.
Yang Yuanqing said that Lenovo is expanding its infrastructure of ultra-large-scale computing technology to support cloud computing on the basis of traditional IT and high-performance computing, while developing hyper-integration technology to cope with new changes in the development of the Internet. He believes that with the expansion of DCG business, profits will also be further improved.
In addition, according to Yang Yuanqing, Lenovo is also incubating solutions for intelligent vertical industries, including four key directions: intelligent manufacturing, intelligent retail, intelligent education and intelligent medical care. Through service, Lenovo will put solutions in the above areas into practice.
Yang Yuanqing said that Lenovo's vision and strategy are very clear: to become a leader and enabler in the era of intelligence. Strategically, it is achieved by driving intelligent Internet of Things, intelligent infrastructure and intelligent vertical industry solutions. He said that through the strategy, not only can Lenovo's short-term performance be improved, in the medium and long term, have better prospects for development. (Zhou Feng)
The following is a record of media exchanges. Sina Technology collation:
Media: Real economy gross profit has always been very low, do you think it will be more tired to do real economy?
Yang Yuanqing: No, we also have a good profit. This is the business model of our industry. Like PCSD 5%, PC and 5.4% of pre tax profits, I think they are quite profitable. Of course, we are also actively expanding new businesses, such as the vertical industry solutions I just talked about, and we will focus on the service industry.
One category of service industry is the maintenance of computers, followed by DaaS, which has changed from selling hardware products to selling services. Now we are trying in Asia-Pacific. For example, there are many employees in the enterprise who want to buy consumables, paper, pen and ink. They are put into the enterprise like vending containers and provide them. Service has turned it into a form of service.
Of course, we are also strengthening services in the areas of Internet consumption. China's mobile phone business, from the service revenue is also a very important means to make up for profit. We are also developing Internet services in Japan and Brazil. For example, games, music, Video and so on.
We have a company in Europe called Medion. In fact, it provides virtual operator services for mobile phone users in Europe, as well as music and video services. Together, it generates nearly 700 million dollars in revenue, just for a quarter.
Media: what is Lenovo's expectation for China's mobile phone business?
Liu Jun: China's mobile phone market is not very good, but it starts with negative growth. But mobile phone is a strategic business for Lenovo. We announced the return of Lenovo brand to the Chinese market. This is actually a long-term plan, because we regard mobile phone as the most important product, we will invest in it for a long time and do it well. And we have a good foundation. We have many IT technologies and many years of supply chain technology.
In the short term, we are very focused on products, and the flagship product is Z5, which is very sensational. We are ready to launch another flagship product in Shuangxi, Z5 Pro, slide cover full screen product. The reservation for this product has reached 500,000 units, so it is a very good product.
Our idea is to have a good mind and concentrate on making the product first.
Media: For Lenovo mobile phone, will the positioning of good conscience cause difficulties in high-end transformation? Lenovo mobile phones in the future will be like high-end transformation?
Liu Jun: We regard smartphones as an important part of SloT 2.0 (Intelligent Internet of Things 2.0) strategy, so when we make mobile pricing, we pay more attention to the follow-up interaction of mobile phones with customers and the benefits of providing services to customers.
In the early stage of hardware pricing, we gave a good price, the whole logic and philosophy is different from other manufacturers.
Returning to the new model, we thought very clearly at the beginning, and it is a long-term idea. Mobile phones are our carrier for expanding our customers. We need to serve these customers for a long time, which is very clear to us at the beginning. It may not be exactly the same as other business friends.
The answer to the question of high-end is a bit vague. I don't want to have any misunderstanding. Our first product, Z5, is the most golden spot. When we pushed Z5 Pro, our price was nearly 2,000 yuan, a little higher than Z5.
In the future, as the product mix increases, we will continue to introduce standard products, and you will see a variety of high-end products next year. But that does not mean that we will abandon the mainstream.
Yang Yuanqing: It will only be strengthened. Mobile phones are our long-term focus. After starting to make profits and have a healthy business, we will definitely continue to invest in innovation, channel construction and brand building. We are now in the R&D laboratory. There are many good products. We will meet you at the beginning of next year.
Liu Jun: Plus, because the high-end business people are also our target customers, we have launched product development relative to them. We have made a very long-term plan for mobile phones, which will be implemented step by step.
Media: what is the progress of Lenovo and NetAPP's joint venture storage company? Will income and business be reflected in the earnings report?
Tong Fuyao: The team is now in the process of integration. The good news is that the company is now in the process of final registration. In the future, all NetAPP teams will join the joint venture company and work with Lenovo's team to form a dual sales outlet and a dual brand strategy.
NetAPP's high-end technology lies in its storage and data management capabilities, because the joint venture company's biggest highlight is that it will have its own R&D center, we will tailor-made to Chinese customers, design dedicated solutions and technologies.
Yang Yuanqing: NetAPP is still of great significance to Lenovo's data center business. Of course, Lenovo's data center business still has a long way to go, because we have not carried out this business for a long time, but this business has declined in the past period?
The reason for the decline is that cloud computing is rising. Now, instead of buying this server, companies are buying cloud computing directly. Therefore, there are enterprises, not only Internet companies, including traditional enterprises, in the new business, applications, it will consider the way of cloud computing.
So, in the face of Lenovo, there are bigger challenges.
Challenge 1: we will endure such a decline.
Challenge two: we are more enterprising in cloud computing company's equipment or infrastructure providers.
Demand is different. If you want to provide Amazon, Microsoft and BAT, you have to be restrained. You have to have competitive costs.
In addition, from a technical point of view, the traditional infrastructure is very separate, but in cloud computing, it is more hyper-integration, all these things are defined by software. Therefore, in the past time, we were actually making up lessons, and we made up the two courses:
First, the design and marketing capabilities of the super large scale computing center.
Second, super fusion technology and market sales ability.
Fortunately, you can already see that in these two areas, in the past few records, we are all super-fast growth.
In the past, we only had two engines, traditional computing centers, supercomputers, especially now AI needs supercomputers. We are very strong in this field. We are the first in the world, the most advanced scientific institutes in the world. Of the top 25, the first 22 are our customers.
In the past, we were strong in these two areas, but now we are strengthening the other two engines, namely, super-large-scale computing centers and super-integration technology.
But as I just said, even in our traditional data center, we are only strong servers, our storage in the past is weak, and the network is weak. In these two areas, the profit is even higher than that of the server.
So this makes competition relatively at a disadvantage. We are cooperating with NetAPP, we are cooperating overseas and joint venture in China, which has expanded the coverage of our storage products. So this will greatly enhance our competitiveness in the data center area, can continue to grow, and can drive our profits, users need to get market coverage.
Media: How does Lenovo plan the proportion of public, private and mixed clouds, especially mixed clouds?
Tong Fuyao: I think a large number of private clouds of small and medium-sized enterprises are public clouds, and the future is a trend. But neither do you.
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