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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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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.


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