Tue, Jan 29, 2013 - Page 13 News List

Acer to adopt new branding strategy, diversify products

By Helen Ku  /  Staff reporter

Acer Inc (宏碁), the world’s No. 4 PC brand, is planning to adopt new branding strategies and focus more on tablets to regain profitability this year.

“I hate losses,” Acer chairman Wang Jeng-tang (王振堂) told a press conference yesterday, after the company last week announced a NT$3.5 billion (US$120.1 million) asset impairment charge on trademark rights that caused it to report losses for the second consecutive year since 2011.

According to Acer, the write-off of its brands, such as Gateway, Packard Bell, eMachines and E-Ten (倚天), would lower its net worth per share by NT$1.3 from NT$28.8 to NT$27.5.

Last week, Acer announced that it would discontinue its eMachines brand.

Acer spokeswoman Lisa Emard said the company would continue to invest in Gateway and Packard Bell to sell “a variety of devices that would have been thought of as beyond the PC in the past.”

“As computing devices are used in new ways, both on the go and at home, Gateway and Packard Bell will adapt their product portfolios to meet these needs,” Emard said in an e-mailed statement.

Wang said the company will get back on track under three major brand names — Acer, Gateway and Packard Bell — and pledged to make a profit this year.

In addition, the company would rely on new product strategies to transform itself from being a pure notebook computer manufacturer to one that also produces tablets and smartphones, Wang said.

After introducing its budget tablet, the Iconia B1, earlier this month, Acer is planning to roll out more mid and high-end tablets to increase its share in the market, he added.

However, a Fubon Securities Investment Services Co (富邦投顧) analyst yesterday maintained a cautious outlook on the company.

“It is not necessary for a PC company to own so many brands,” Fubon analyst Arthur Liao (廖顯毅) said by telephone.

“Gateway and Packard Bell-branded products are losing ground in the US and European markets. Continuing to invest in these two brands will do little to help Acer generate sales. It would be better for Acer to sell Gateway and Packard Bell, and concentrate on investing its major brand ‘Acer’ only,” he said.

Liao forecast that Acer would barely make a profit this year if it does not diversify its product portfolio and upgrade its product specifications.

“Most budget tablets have low specifications and cannot win consumers’ confidence,” he said. “Acer should look to Asustek Computer Inc (華碩) and learn from them to build solid Android-supported PC products that can help itself regain market share. Brands may be important, but good products are what the market is looking for.”

Fubon recommended a target price of NT$22 for Acer shares, which closed 0.21 percent higher at NT$24.05 yesterday, underperforming the broader market, which gained 0.55 percent.

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