PC manufacturer Lenovo Group has announced a 23 per cent rise in profit during the first quarter after seeing a massive 39 per cent boost in worldwide smartphone sales.
Net income for the firm jumped to £128m, in the three months ending June, up 23 per cent on the same period last year.
The Beijing-based firm, which spent £3bn alone on new acquisitions, last week displaced Samsung as the best-selling smartphone seller in China.
The firm’s PC business bucked trends seeing a 12 per cent increase in laptop sales despite a 3.7 per cent drop worldwide.
Yang Yuanqing, CEO of Lenovo, told the Wall Street Journal: “The smartphone market’s focus is shifting from premium products to mainstream and entry-level products. We have seen this before in the PC market, and we have a lot of experience in these kinds of transitions.
"I would say China is the most competitive market in the world. There are so many local players, and some of them are not logical in how they do business, they don’t want to make money in the short term."
Yang added: “We definitely don’t want to lose our leadership position in China, and we must balance growth in market share with profitability. Our smartphone business in China makes a little bit of money, but not so much."
The firm is currently awaiting US regulatory approval to purchase IBM's low-end server unit and Motorola's handset business from Google.