Fri, Apr 30, 2010 - Page 12 News List

Acer overtakes HP in notebooks

EMERGING MARKETSAcer sees the biggest opportunities for growth in China and Brazil and has sent engineers to China to custom design products for buyers there

By Jason Tan  /  STAFF REPORTER

Acer Inc (宏碁), which successfully unseated Hewlett-Packard Co to take the top spot in the notebook market in the first quarter, yesterday said desktop sales and emerging markets — especially China and Brazil — would fuel growth this year.

While sales of conventional desktops are somewhat sluggish, Acer sees growing momentum from its small-form desktops, such as all-in-one PCs, CEO and president Gianfranco Lanci said.

Thanks to growing demand for better graphics and applications including 3D, small-form PCs have pushed up overall sales of desktops, he told an investor conference.

“The desktop momentum will help us grow in overall PC shipments,” Lanci said.

Citing preliminary data from Gartner Inc, Lanci said Acer successfully overtook HP to become the world’s top notebook brand in the first quarter, with a 19.6 percent market share. It was the world’s No. 2 in PCs, which includes both desktops and notebooks, with a 14.1 percent share.

This year, Acer sees China and Brazil as the two markets that show the biggest opportunities for growth.

The company has deployed engineers to Beijing and Shanghai to design products that cater to local tastes, chairman Wang Jeng-tang (王振堂) said.

For instance, he said, unlike their peers in Europe and the US, who prefer 15-inch laptops, Chinese consumers are more receptive toward 14-inch notebooks and demand strong graphic performance.

“We aim to make a breakthrough in the China market this year,” Wang said, adding that Acer aims to double revenues there to US$1.5 billion this year.

Acer adopted a new strategy by hiring “thousands” of promoters in China to sell its products in stores and interact with customers directly, Wang said. The company is also spending lavishly on marketing to reach out to more consumers there, he said.

Lanci shied away from analysts’ questions as to whether the company has plans to launch tablet PCs — similar to Apple Inc’s iPads — but said tablet PCs were unlikely to cannibalize the netbook market, as they target different consumer segments.

Acer is slated to launch a slew of “Internet devices” at the end of next month that offer features including 3G, WiFi and data sharing, but Lanci refused to comment further.

Acer reported a 63 percent rise in profits from a year ago to NT$3.3 billion (US$105 million) in the first quarter, with earnings per share of NT$1.25, compared with last year’s NT$0.78.

Consolidated revenues climbed 36 percent to NT$162.1 billion in the first three months, while gross margins edged down to 9.7 percent, compared with 10 percent in the previous year, it said.

The company expects business performance in the second quarter to be similar to that in the first. Shares of Acer fell 1.4 percent to close at NT$87.80 before the earnings announcement.

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