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Lenovo takes control of Fujitsu's PC business

Lenovo Group unveiled plans on Thursday (Nov 2) to shoot over Fujitsu's personal computer company after posting its strongest revenue growth in two years amid signs that the PC market is stabilising. The business announced it will buy Fujitsu's client computing department for at least 17.85 billion yen (S$212.9 million), including the Japanese name to its portfolio. China's biggest PC manufacturer reported before on Thursday a 5 percent jump in earnings to US$11.8 billion in the quarter ended September, exceeding projections for US$11.3 billion and now declared the biggest rise since the same interval of 2015.

Net income dropped 11 percent to US$139 million, that was bolstered by accounting earnings. Lenovo climbed as much as 5 per cent in the afternoon, erasing year-to-date losses. Lenovo is struggling to find growth in its key branches of computers, smartphones and servers. Though it lost top place in PCs into HP, the market shrinkage of the last couple of years is now easing and chief executive Yang Yuanqing is taking costs from a mobile company that's made modest improvement since purchasing Motorola to get US$2.9 billion. The business announced it will buy Fujitsu's client computing department for at least 17.85 billion yen (S$212.9 mmillion), including the Japanese name into its own portfolio.

A healthier PC market may finally aid Lenovo's platform almost as much as it has HP or Dell, Anand Srinivasan and Wei Mok. The mobile and server platforms need structural fixes. PC shipments climbed 17 percent in the prior quarter, allowing Lenovo to arrest market share losses. The firm's struggling smartphone division also made headway into Latin America and Western Europe.

Lenovo's business lines remain weak from the past quarter and now it's cash flow problems, said Qian Kai, an analyst with CICC. He noticed that Lenovo gained greater than US$100 million in net income from taxation refunds. I really don't foresee Lenovo turning to its smartphone business. It lags far behind market leaders in China and in the markets such as India in which they did well, the challenge is growing thanks to companies like Xiaomi.

The business continues to face rising prices for elements such as memory chips. Chief operating officer Gianfranco Lanci stated he expects prices for key components like memory chips to help keep rising during the rest of the year, albeit at a much lesser rate. Our cellular company turnaround remains in advance, Yang said in an announcement.

While the 2005 purchase of International Business Machines Corp's PC division repaid by lifting Lenovo closer to the peak of the current market, prices in 2014 to get IBM's low profile host unit and Motorola have not gone as smoothly. It is now re-enlisted the executive who steered the Motorola acquisition to conduct its Chinese PC arm to breathe fresh life into the enterprise.