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Will focus on increased profit margins instead of sales volumes

Now that Gianfranco Lanci is no longer the CEO and President of Acer Inc., the company can follow the vision of its board of directors -- by being more like Apple and HTC. 

Lanci's goal -- and, by extension, Acer's -- in the past was to sell more laptops than anyone else, including Hewlett Packard. Despite some successes, the strategy wasn't working for Acer's bottom line, with the company facing its second straight losing quarter. 

The rift in ideology caused Lanci to resign abruptly yesterday. According to Bloomberg BusinessWeek, Acer will name a new president -- one with experience in smartphones and tablets -- later this month. Company chairman, J.T. Wang, will fill the spot in the interim.

"For Acer, and other PC makers in general, the way to create value is to innovate and find new markets and opportunities, and that’s a big challenge," Simon Ye, a Gartner analyst, told Bloomberg. "Acer’s problem is that it is commonly perceived as a brand that competes on price, and that doesn’t help profitability." 

Acer's focus going forward is to maximize profitability instead of sheer sales volumes, spokesman Henry Wang told Bloomberg. This will require, among other things, an increase in spending on research and development.

Apple's business model is certainly one the Taiwanese company will be looking to emulate. According to Bloomberg, the iPad maker had a 21.5 percent profit margin in its last fiscal year, while Acer had a mere 2.3 percent. 

One major focus of the future is the tablet market, which has proven its worth over the last few quarters in particular. "There is good consensus among the board members that the tablet is the way to go," Acer CFO Tu Che-min told Bloomberg.

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But who will sell...
By piroroadkill on 4/1/2011 8:21:34 AM , Rating: 2
Cheap tat?

Acer is a budget brand, and I very much doubt they can turn that image around, and infact, they shouldn't - there is definitely room for a budget manufacturer.

RE: But who will sell...
By Hiawa23 on 4/1/2011 9:12:34 AM , Rating: 2
nothing wrong with being a budget brand, but they have to make money & if they can't then something needs to change.

RE: But who will sell...
By Boze on 4/1/2011 12:16:07 PM , Rating: 2
20 years ago Samsung was a budget brand.

Now they're one of, if not the, highest quality brand of television in the world.

It can be done.

Nintendo used to make playing cards...

RE: But who will sell...
By lawrance on 4/1/2011 3:13:15 PM , Rating: 4
Another South Korean brand who turned things around is Hyundai / Kia... For decades they were to the go-to brands to cite inferior products. They are now making some really good products that are actually starting to compete with the worlds best Japanese brands. If they keep this pace up, Hyundai will be used in the same sentence as Lexus in less than a decade. Pretty impressive turnaround for any company.

RE: But who will sell...
By Windogg on 4/1/2011 6:51:23 PM , Rating: 2
LG as well. Back when they were Goldstar, all of their stuff was junk. Today they make pretty darn good products.

RE: But who will sell...
By Azethoth on 4/2/2011 2:50:57 PM , Rating: 1
"Nintendo used to make playing cards..."

Yeah man, Wizards of the Coast should start shipping consoles!

RE: But who will sell...
By shortylickens on 4/3/2011 10:38:13 AM , Rating: 2
Agreed. I like them better as the little guy who makes basic stuff. I love my cheap netbook, no way in hell I'd pay extra just cuz they put it in a pretty case.

And if its just profit margins they are worried about, they should not try to compete with Apple. They dont have an exclusive desktop & mobile OS. Theres nothing for them to compete with. Unless they make their own Linux Distro.

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