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Wednesday, 24 August 2011 11:41

Acer gutted

Written by Nick Farell
acer

They should never have fired that nice Italian
Acer is looking pretty stupid this year after it fired Gianfranco Lanci for the crime of not copying Steve Jobs.

Acer gave Lanci his marching orders after he dared to say that that Tablets were an Apple thing and people were not going to make money out of them. However it turns out that Lanci was completely right and while he expected trouble ahead for the outfit, thanks to a downturn in the PC industry, he did not think a half-arsed move into tablets would solve the problem.

As a result Acer has reported a worse-than-expected quarterly loss, the first in company history. It has been hurt by charges for an inventory write-off and reorganization which it did not need to have to fix the mobile problem. It now says that it would be impossible to break even for the full year and that is assuming that mobiles and tablets take off after all.

Acer has been a dominant force in the PC business, particularly in the low-cost notebook segment. It is this very segment which if marketed properly could have saved the outfit as Europeans looked for cheaper gear as their economy tanks. Instead Acer has committed itself to flogging expensive tablets which only the rich and stupid think are a good idea and end up being expensive tea-trays.

The world's No.2 PC vendor posted a net loss of $234.3 million in April-June, much worse than the consensus forecast of a T$3.3 billion loss from six analysts polled by Reuters. To make matters worse, Acer made efforts to further downsize channel inventory due to stagnant European and U.S. economies, and the slow PC market.

So in the areas where it could make money, it can't. It is also cutting 300 jobs in the EU which, if is going to buy a PC at all, will want the cheap stuff that Acer flogs. Chairman J.T. Wang told a subsequent investor briefing that Acer will still see a loss in the third quarter, though it would be better than the second quarter.

Acer real hope might be that it might benefit from rival HP's plan to spin off its PC business. Unfortunately the region that it might scoop up the most cost from that silly decision is Europe where it has just downsized its operation.

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