Fri, Apr 01, 2011 - Page 12 News List

REPORTER’S NOTEBOOK: Acer bids farewell to Lanci as it looks to new growth direction, strategies

By Jason Tan 陳聯璟

The departure of 14-year veteran Gianfranco Lanci from Acer Inc (宏碁), one of the world’s top three PC brands, shocked the tech industry yesterday, but it wasn’t as shocking for Acer’s employees.

“Rumors that Lanci was leaving had been spreading for some time,” an internal source told the Taipei Times yesterday.

Acer’s profitability dwindled in the fourth quarter of last year and is expected to continue dropping in the first quarter of this year, with Lanci’s failure to come up with solid strategies for the company’s future seemingly having cost him his job.

Acer’s fourth-quarter profit was 9.1 percent less than the NT$4.29 billion (US$145.8 million) it made in the third quarter of last year, company data showed.

On a year-on-year basis, it rose 11.4 percent to NT$3.9 billion.

Revenue in the fourth quarter, meanwhile, saw a 10.5 percent decline from NT$167.2 billion in the third. It dipped 11 percent year-on-year to NT$149.7 billion.

FALLING SALES

The company said last Friday that first-quarter revenue looked set to fall about 10 percent from the previous three months amid weaker demand from Western Europe and the US, adding that second-quarter sales should roughly be the same as in the first quarter.

Lanci had been granted power by Acer’s board over major decisionmaking processes in the past and therefore could claim credit for Acer’s achievements, the source said.

This was fine as long as he steered the PC maker into profitability, but without concrete financial results recently and no solid direction going forward, it was the board that called it quits, the source added.

MULTINATIONAL

“Don’t you think Acer is now a ‘multinational enterprise?’” the source said, referring to Lanci’s dismissal by the board — an uncommon practice among Taiwanese companies.

Acer, under Lanci’s guidance, had been eager to seize the world’s No. 1 PC spot and aimed to unseat US giants Dell Inc and Hewlett-Packard Co.

While the goal meant Acer was beating rivals with a surge in shipments of desktops and portable computers, it meant sacrificing profitability to boost shipments, Acer founder Stan Shih (施振榮) said on Tuesday.

Focusing on profitability instead of shipments should be the way forward in the face of drastic changes in the PC landscape, he said.

“The impact of recent drastic changes in the PC industry, especially smartphones and tablet PCs, have been far greater than expected,” Shih wrote in an e-mail to the media yesterday.

To cope with such changes, Acer has outlined new strategies, but the management held differing views.

“After many dialogues, no consensus was reached and the board had to make a decision for the company’s sustainable operations, otherwise Acer’s future would be held back,” Shih wrote.

In his role as president and CEO, Lanci contributed significantly to Acer’s growth over the past seven to eight years. His departure will have a certain impact on Acer, but Shih — who retired from the company and now is the chairman of iD SoftCapital Group (智融集團) — said in the e-mail that teamwork would be key to success if members work together to carry out the company’s development strategies.

INDUSTRY VETERAN

Born in Turin, Italy, in 1954, Lanci graduated from the Politecnico of Turin with a degree in civil engineering.

He joined Texas Instruments (TI) Italia in 1981, and at the age of 37 became country manager for the portable computers and printers division in Italy, the Middle East and Africa.

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