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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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Abou time
By Commodus on 4/1/2011 8:40:35 AM , Rating: 5
In many ways, Acer has embodied what's wrong with the Windows PC market: that race to the bottom for price that hurts quality and kills originality. All about superficially big numbers to lure someone in for that Best Buy special and to push market share.

I've been following Acer's reactions for the past year, and it's been hilarious: each quarter it keeps insisting the iPad is a short-term fad, and everyone will "come to their senses" Any Day Now to just keep buying netbooks for all eternity. Then the iPad steals some more market share, and they repeat the claims Apple will go away.

"Head in the sand" is not a viable competitive strategy.

RE: Abou time
By spread on 4/1/11, Rating: 0
RE: Abou time
By KoolAidMan1 on 4/1/2011 11:36:56 PM , Rating: 2
Nailed it. I'd rate your post higher if I could but it is already a 5. :)

RE: Abou time
By Strunf on 4/4/2011 8:14:44 AM , Rating: 2
There's nothing wrong with packing more value into a product, actually the strength of the PC its exactly that. The price of a brand PC (desktop) shouldn't be much higher than the sum of it's components, this difference comes from the value you put into support and design, besides that all PCs are pretty much the same.

I've been building PC for some time and I never found them any less stable than brand PC for 1/3 of its price, today however we can find some nice cheap brand PC so building your own PC doesn't save you that much money anymore. I don't see why people would spend more money to buy an Acer, even SONY and other brand now build more affordable PCs cause they know there's money to be made on this segment too.

Don't compare Acer with Apple, Apple could sell its stuff for 4x or 5x the price it costs them to make and people would still buy it, when you want a Apple product you will pay whatever Apple asks for it, now a PC ?...

“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads

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