In a bad sign for the PC industry, Lenovo touted its success in smartphones during the company's fiscal 2014 first-quarter earnings conference call.
Lenovo K900 smartphone.
Lenovo reported on Thursday that quarterly profits jumped 23 percent over the same period last year. Net profit came to US$174 million in the quarter ending in June, compared with US$141 million last year. That beat Wall Street's profit estimate, which was expected to be US$167 million.
Revenue hit US$8.8 billion, up 9.7 percent from the US$8 billion reported last year.
Historically, Lenovo has been viewed as a PC company, but the CEO spent a lot of time talking about its surging smartphone business during a recent conference call.
"In China, we sold more than 11 million [smartphone] units, and continued to strengthen our No. 2 position," CEO Yang Yuanqing said.
"Last quarter, our combined sales of smartphones and tablets surpassed PCs for the first time," he said. Lenovo's range of smartphones have never been released in Australia.
He said the shift to smartphones and tablets is turning Lenovo from a PC company into a "PC plus" company. Tablets with 4G capability are "gearing up", he added.
Though the CEO cited the decline in the PC market, he said customers in the corporate "enterprise" market, especially in the US, are upgrading their PCs from Windows XP to Windows 7 and Windows 8, which is driving sales.
Market researcher IDC said in July that Lenovo surpassed Hewlett-Packard to become the largest global PC vendor in the second quarter.