On August 15, Lenovo Group announced its first quarter performance for the 2024/25 fiscal year ending June 30, 2024. Overall revenue grew strongly, up 20% year-on-year, while profit grew even faster. According to non-Hong Kong financial reporting standards, net income increased by a significant 65% year-on-year, approaching RMB 2.3 billion. The proportion of non-personal computer businesses in the total revenue of the three major business groups increased by 5 percentage points compared to the same period last year, reaching a historical high of nearly 47%.
Yang Yuanqing, Chairman and CEO of Lenovo Group, stated during the financial report meeting that the IDG smart device business showed strong performance in the previous quarter, with revenue achieving double-digit year-on-year growth and operating profit margin increasing by nearly 1 percentage point year-on-year. In the personal computer field, Lenovo's shipment and activation volume have both strengthened its market-leading position with growth faster than the market average, while also maintaining industry-leading profitability. Looking forward, Lenovo expects AI PC will accelerate the personal computer market to enter a new round of replacement cycle, accounting for more than half of the total volume of personal computers by 2027. Lenovo will unleash the potential of personal intelligent entities through innovation, and build a more diversified product portfolio and richer ecosystem in combination with deepened strategic partnerships.
The IDG business, composed of personal computers, tablets, smart phones, and other smart devices, performed better than expected in terms of revenue growth, achieving 11% for the quarter. This was mainly due to the recovery of sales in the commercial market and the shift in demand towards high-margin products. The high-end personal computer combination of IDG increased by 3.4 percentage points, and obtained nearly 70% of personal computer revenue from the commercial market, which had a positive impact on the average selling price. The operating profit of IDG increased by 27% YoY, and the branch profit rate increased by 92 basis points to 7.3% YoY, reaching the upper limit of its historical range. Lenovo Group stated that it has increased investment in the transformation plan to seize opportunities in the emerging AI computing industry. Before the end of this quarter, Lenovo Group launched a brand new AI PC product based on Arm architecture, aiming to establish a positive trend for future average selling prices and sales combinations.
The AI PC launched in May this year, with 5 major features, received very positive user feedback and is expected to achieve nearly 10% of the expected sales percentage before the end of the year. The revenue of smart phones and tablets has achieved a high-speed year-on-year growth of about 30%, and the performance of the smart phone business in the Asia-Pacific, Europe-Middle East-Africa and North America regions is particularly outstanding. Apart from the Chinese market, Lenovo's market share of smart phones has increased by 2 percentage points since the second quarter of 2020, making it the sixth largest supplier in the world.