At this point, Microsoft's new Windows 8 operating system has been dubbed a failure almost more times than can be counted. It's been likened to the Zune, to Vista... even a New Coke comparison has managed to work its way into the conversation.
There's a bright spot in the PC industry, though, and it's Hong Kong-based Lenovo. While the general decline of the PC market has caused many analysts to point the finger at an unappealing Windows 8 operating system, Lenovo has managed to defy expectations and post record profits.
For its fiscal year ending in March, Lenovo generated $34 billion in sales, a 15 percent improvement over the previous year's sales. Earnings were also up 34 percent, resulting in a record-setting $635 million.
Perhaps even more impressive, however, is that while PC sales shrunk by about 8 percent compared to the previous year, Lenovo's PC shipments grew by more than 10 percent. Whether Windows 8 is a poor performer or not, whatever PCs people are buying, it seems like they're coming from Lenovo.
"Somebody over there is doing something right," Alberto Moel, an analyst at Sanford C. Bernstein & Co. in Hong Kong, said to Bloomberg. "The size of the beat is quite solid. They did better margins everywhere, with material expansion in PCs in Europe, Middle East and Africa as well as North America, while the smartphone business also continued to improve."
Looking forward, Lenovo isn't just staying fixated on the PC industry. It's also begun expanding into tablets and smartphones, which it sees as complements to a healthy PC line-up.
"We have a strong PC business foundation that we are confident will be even stronger and more profitable in the year ahead," Lenovo Chief Executive Officer Yang Yuanqing said at an earnings conference, according to Bloomberg. "At the same time, we are now much more than a PC company."
"Going forward, we will focus our investments on the fast-growing tablet, smartphone, and enterprise hardware areas, while working to enhance the profitability of our core PC business," Yang added in a statement. "We are very confident in our ability to achieve success in these new areas, just as in the PC business."
