Lenovo Continues Acquisition Hunt As Smartphones And Tablets Top PC Sales

Lenovo LNVGY is making headlines this morning after reiterating its mission to acquire major businesses within the smartphone and PC sectors. In January, a Lenovo CFO Wong Wai Ming revealed that the company was looking at "all opportunities" -- including BlackBerry BBRY, which was known as Research In Motion at the time. Lenovo quickly downplayed reports that it would buy BlackBerry, but that didn't stop investors from taking notice. After all, this could be the takeover of a lifetime for those who are long BlackBerry. Several months have passed since Ming's statements were made, but Lenovo wants its investors to know that the company still plans to make a major acquisition. "We are definitely seeking opportunities in both the PC and phone areas," Lenovo CEO Yang Yuanqing told Bloomberg. "The industry is in a period of consolidation, so we definitely should take the opportunity if we can find the right target." Yuanqing's statement came after the company announced that PC sales have been exceeded by those for smartphones and tablets. According to CNET, the company's profit increased 23 percent during the fiscal 2014 first quarter. Lenovo's net profit jumped to $174 million versus $141 during the year ago period, beating the Street's estimate by $7 million. Lenovo more than doubled its smartphone shipments, sending 11.4 million units to retail last quarter. When combined with tablet sales, Lenovo's mobile electronics proved to be the company's most important assets. This is an interesting twist in the sales equation, especially after Lenovo successfully outsold Hewlett-Packard HPQ, the former world leader in PC sales. HP is expected to take back the sales lead this quarter, but that lead may not last if tablets continue to replace PC sales. Thus far, none of HP's tablets have become massive sellers. When the company tried its hand at developing an iPad competitor to fend off Apple AAPL, it sold so poorly that HP reduced the price by 80 percent. Its latest tablet, the Slate 7, recently dropped from $169 to $139. The price is listed as a "sale," but the reduction has been in place for several weeks. Lenovo is taking a different strategy. Instead of waiting for sales results to dictate the price drop, the company has already taken $120 off of its upcoming Windows 8 tablet/laptop hybrid. Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report. Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ