Lenovo beats Q3 net forecasts by raising market share

Lenovo's performance in China was also a strong point, analysts said.

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"Lenovo's performance in China is quite a major factor on why it beat the consensus in the third quarter. It continued to gain market share and its margins there are also the highest compared to the performance in other emerging markets," said Jenny Shih, an analyst with Daiwa CapitalMarkets in Taipei.

China constituted 42 percent of Lenovo's total sales. Its market share in China rose 3.1 percentage points year on year to 35 percent during the reporting quarter, the company said.

"It is also doing pretty well in certain mature markets. The United States for example, has gained market share as some commercial PC users switched to Lenovo given concerns over HP's management and strategy," Shih said.

The Beijing-based, Hong Kong-listed company reported a net profit of $153.46 million for the three months ended December, up 54 percent from $99.65 million a year earlier and outpacing the $130.2 million in a poll by Thomson Reuters I/B/E/S. Third-quarter revenue rose 44 percent from a year earlier to $8.37 billion.

Analysts said Lenovo, which last year edged out Dell Inc to rank behind market leader Hewlett Packard Co in PC sales, needs to increase market share in the fast-growing tablet and smartphone sectors as traditional PCs and laptops have become commoditized.

The company has been diversifying into smartphones and tablets with its LePhone and LePad devices, although market share still lags that of major players such as Apple Inc, Samsung Electronics Co Ltd and Chinese companies Huawei Technologies and ZTE Corp.

In the last fiscal quarter, Lenovo shipped 400,000 tablets globally and 6.5 million handsets, including smartphones, executives said on Thursday. Lenovo is now the No.2 tablet provider in China, ranking behind Apple.

"For tablets, there isn't a big contender out there to compete with Apple (globally)," CIMB's Ng said. "If you look at China, Lenovo's brand name is pretty strong."

Lenovo has also launched an online application store called LeGarden and showcased its first smart TV running Google Inc's Android operating system "Ice Cream Sandwich" in a bid to boost its brand in the sector.