backtop


Print 17 comment(s) - last by Solandri.. on Jan 20 at 5:10 PM

Loss was nearly twice analyst estimates, Acer "admits" to mistakes, cuts executive pay

Reportedly afraid that hiring American and European engineers for a mobile push would "de-Taiwanese" the company, Acer, Inc. (TPE:2353) fired its star CEO, who had propelled it to become the world's second largest PC maker.  That man -- Gianfranco Lanci -- went on to lead Hong Kong-based Lenovo Group, Ltd.'s (HKG: 0992) European, Middle Eastern, and Asian businesses (EMEA), propelling Lenovo to #1 in the PC market and #3 in the smartphone market.  Acer meanwhile has fallen on dark times.
 
I. Acer Manages to Lose More Than Analyst Predictions Again
 
Acer witnessed an industry-worst decline of PC sales of 24.1 percent (according to the Time Warner Inc.'s (TWX) analysis house IDC Group.) in Q4 2013, and has fallen to fourth place in PC sales, outsold nearly 3-to-1 globally by Lenovo, according to Gartner, Inc. (IT).
 
Acer entered the holiday season coming off a record loss of T$13.12B ($446M USD) on revenue of T$92.1B USD ($3.13B USD).


Acer Aspire V7
Of all the major OEMs Acer saw the biggest decline in PC sales in 2013.

In Q4 2013 it did better; but not much better.  It lost NT$7.63B ($254.79M USD), plus took an additional write down of NT$1.3B (US$44M) on unsold inventory (Windows 8 tablets, ultrabooks) and other items. 
 
Analysts surveyed by Thomson Reuters I/B/E/S expected only a loss of NT$3.60B ($120.21M USD), less than half of the actual loss.
 
Revenue fell to NT$86.7B (US$2.89B).
 
II. Executives Get Paycut -- But Will it Force Change or Quicken Fall?
 
In addition to a previously announced 7 cut to its staff globally, after its latest quarter, Acer announced it would cut executive pay 30 percent.
 
We've seen this kind of strategy in recent history by another struggling Taiwanese OEM, HTC Corp. (TPE:2498).  In HTC's case the strategy proved a double-edged sword as much of the company's top level talent defected elsewhere.  Some HTC executives even plotted to steal company secrets after the pay cuts were announced.  We'll see how well it works out for Acer.

Jason Chen
Jason Chen, Acer's new CEO, addresses reporters on Monday. [Image Source: Reuters]

 
In a press release Acer writes:

Acer acknowledges missteps in the past on resource allocation, and the over expectation of ultrabooks and notebooks with touch panel. Although the products were leading in design they did not accurately fulfill market needs.
...
Taking immediate action, Acer will formulate its product strategy with more caution and implement precise production planning and inventory control. Senior executives have also taken voluntary salary cuts of 30% from January to share responsibility.

Acer is currently on its third CEO in just three months.  To be fair, though, the latest CEO -- Jason Chen -- carries with him a strong track record from Taiwan Semiconductor Manufacturing Comp., Ltd. (TSMC) (TPE:2330).  Whether he can fix Acer's self-described "cheap" and "unprofitable" product, however, is anyone's guess.

Sources: Acer, Reuters



Comments     Threshold


This article is over a month old, voting and posting comments is disabled

PC market too competitive
By vision33r on 1/19/2014 1:39:46 AM , Rating: 2
There's too much competition in the PC market. People buy brand names and Acer just doesn't carry the same reputation as Dell, HP, and Lenovo.

People know Lenovo because their job gave them a Thinkpad so they will buy a similar one for their home. Same with Dell and HP.

If Acer is not popular with businesses, there's very little chance to succeed in the US.




RE: PC market too competitive
By Nagorak on 1/19/2014 9:17:51 AM , Rating: 2
I agree. I think the problem is the PC market is currently a declining market. That means all of the major players are struggling to maintain sales and grab a larger portion of the shrinking market for themselves. In that case, those companies that are slightly less good, or less well known are going to struggle.

Acer is basically a mediocre company. Are its products bad? Not really, but they're edged out by their rivals. Either way in a declining market someone, or everyone, is going to suffer.


RE: PC market too competitive
By Cypherdude1 on 1/20/2014 11:20:20 AM , Rating: 2
We have 2 Lenovo laptops which I bought in 2011. Because Lenovo never bothered to write new video drivers, Windows 7-64 Update did not offer SP1. I had to download SP1 manually. I tried to download the Intel drivers but they would not install. Apparently, the video drivers must be tailored for the laptop. Today, while I do have SP1 installed, Amazon videos do not play correctly. On my desktop, which has a dedicated video card and I have the latest nVidia drivers, all videos play correctly.

Lenovo does not seem to support their laptops with the latest drivers after they sell them. Asus does the same thing with their third party SATA and USB3.0 motherboard controllers. There are NO firmware and driver updates on Asus's site. For Asus, I am reluctantly forced to rely upon third party web sites such as:
http://www.station-drivers.com

I am very cautious about using firmware and drivers from third party sites. For the mobo third party controllers, firmware updates are more or less permanent. I have not updated the firmware for my Asus mobo third party SATA controllers at all and have no plans to unless there is a major problem. For the Renesas USB3.0 controller, it took me 6 hours to figure out how to flash the firmware because station-drivers is a French site and they did not include any instructions. I built my desktop for my business and I don't want it disabled:
http://tinyurl.com/5monitors

For Lenovo, because I could not find any video driver update at all, I have not updated the video drivers. I could call Lenovo's tech support and ask them, but I am not going to pay them just to have them say they don't have anything. I posted on Lenovo's forum over a year ago but I never got an answer.


RE: PC market too competitive
By jbwhite99 on 1/20/2014 3:28:35 PM , Rating: 2
You don't identify what updates you are looking for. I've never had a problem finding updates for my ThinkPads - but I don't know as much on the Idea side.

As opposed to Dell, who wouldn't provide Vista drivers for my 2005FPW monitor. It was definitely not FTW since it wouldn't work with the right resolution.


RE: PC market too competitive
By Solandri on 1/20/2014 5:05:22 PM , Rating: 2
quote:
We have 2 Lenovo laptops which I bought in 2011. Because Lenovo never bothered to write new video drivers, Windows 7-64 Update did not offer SP1. I had to download SP1 manually. I tried to download the Intel drivers but they would not install. Apparently, the video drivers must be tailored for the laptop.

That's the way all laptop video drivers work, just not Lenovo's. The generic drivers check to see what product they're installing on, and if it's not an approved device, they fail to install.

None of the laptop video chipsets I've used (IBM, Lenovo, Toshiba, Dell, HP, Sony, Asus, Samsung, Acer laptops) will pass this check. Unlike desktop video cards, you're supposed to use vendor-supplied drivers. And most vendors don't put out performance-related updates. They'll only put out bug-fix updates.

If you want to use the bleeding edge generic drivers, you have to modify a file which contains a list of which hardware the drivers can install on (which got more complicated when Microsoft started requiring signed drivers). Basically trick the driver installer into thinking your laptop's video card is on the approved list.


well deserved...
By zodiacfml on 1/19/2014 1:03:44 AM , Rating: 2
it is all over the internet that their products are of low quality/reliability compared to lenovo or asus




RE: well deserved...
By Solandri on 1/20/2014 5:10:33 PM , Rating: 2
Some of their newer laptops are actually pretty good quality (e.g. the S7). But yeah, over a decade of making cheap tissue-paper quality laptops has now come back to bite them.

It makes sense if you think about it - PCs are now "fast enough" that you don't need to upgrade every 2-3 years. So people are now expecting the laptops they buy to last 5-7 years. And the companies being hurt the most are the ones whose laptops aren't generally regarded as being able to last that long.


Pay cut
By inighthawki on 1/18/2014 12:07:54 AM , Rating: 2
quote:
Taking immediate action, Acer will formulate its product strategy with more caution and implement precise production planning and inventory control. Senior executives have also taken voluntary salary cuts of 30% from January to share responsibility.

Like most executives taking a "pay cut," I'm sure they reluctantly agreed to cut their salaries from $10M USD per year to a measly $7M USD.




By rountad on 1/18/2014 10:49:46 AM , Rating: 2
I think a new crew of executives might not be able to figure out how to suck and fail in the usual Acer manner.




hahahahaha
By RU482 on 1/19/2014 7:38:29 PM , Rating: 2
Deserved
By Reclaimer77 on 1/17/14, Rating: 0
Got screwed by ACER twice
By Perry Tanko on 1/19/14, Rating: 0
PC sales are down across the board
By splatter85 on 1/18/14, Rating: -1
By inighthawki on 1/18/2014 2:22:09 PM , Rating: 3
If that were true you wouldn't have companies like Lenovo who have done well.


By troysavary on 1/18/2014 7:18:07 PM , Rating: 3
PC companies that don't suck are managing to maintain sales volume.


By Bateluer on 1/18/2014 7:34:47 PM , Rating: 1
Its ironic, isn't it? Windows 8 was supposed to reverse the downward trend of PC sales, but instead, it only accelerated it.


By StevoLincolnite on 1/19/2014 6:12:39 AM , Rating: 2
quote:
Ever since Core2 there hasn't been much of a need to upgrade, for regular consumers.


Right on.

Most people are happy just mucking around with Facebook, Simple flash games, Email, Skype... Which is all that a 7 year old Core 2 Duo is capable of doing easily enough.

Throw in a cheap SSD and they are darn responsive.

Heck, I know people who are still hanging onto their Core 2 Quad Q6600's still, albeit overclocked to 3.6ghz+ and it still handles all the console ports easily enough.


"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan














botimage
Copyright 2014 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki