Lenovo wants to use its "scale advantage" to counter the surge in storage prices.

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On February 12, Lenovo Group disclosed its third quarter results, showing that for the three months ended December 31, 2025, revenue reached $22.2 billion, an increase of 18% year-on-year; however, net profit for the same period was $546 million, a drop of more than 20% year-on-year.

Specifically, revenue from the intelligent device business grew 14% year-on-year; AI-related revenue grew 72% year-on-year, accounting for 32% of the group's total revenue.

Although the revenue performance was impressive, the pressure on costs cannot be ignored. Lenovo Group’s gross profit margin in the third quarter decreased by 0.6 percentage points year-on-year to 15.1%.

Looking ahead to 2026, rising prices of storage and a series of other components continue to add pressure to costs.

Regarding this, Lenovo Group Chairman and CEO Yang Yuanqing admitted that storage prices increased by 40% to 50% last quarter, and the increase this quarter "may double," with the price rising trend already spreading to more core components.

Facing the challenge of rising costs, Yang Yuanqing emphasized Lenovo's "scale moat."

Yang Yuanqing believes that the rise in storage prices has indeed caused supply chain disruptions, but Lenovo, thanks to its scale advantage, is able to secure ample supply and competitive prices in its PC, mobile phone, and server businesses.

Moreover, according to Yang Yuanqing, it is expected that PC sales in 2026 may remain flat or slightly decline, but with the increase in average unit price, sales revenue will see growth. Lenovo is confident that with its advantages in supply chain, operations, and technological innovation, it will maintain double-digit growth in the coming quarters.

Against this backdrop, whether Lenovo Group can continue to maintain high-quality growth under cost pressure is drawing attention.

From the overall situation in consumer hardware, with terminal product price increases, declining sales may have become consensus across the industry.

In fact, this is also true for smartphones. Previously, there were market rumors that Xiaomi, OPPO, vivo, and Transsion would lower their shipment expectations.

With the wave of upstream storage price increases coming in 2026, profit margins for hardware manufacturers will inevitably be further squeezed. Whether companies can offset costs through price hikes and supply chain scale advantages will be key to their competitiveness.

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