Now in Second Place, Acer Keeps Charging Ahead
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Acer reported its best quarter for revenue ever on Friday, smashing its earlier stellar growth rate, and predicting it will do even better thanks to continued growth of netbooks and its planned expansion into smartphones.
Acer reported third quarter revenue 5.3 percent over the third quarter of 2008 to NT$167.6 billion (US$5.2 billion). Net profit increased 14 percent to NT$3.47 billion (US$107.8 million). Acer executives said the company would have done even better had it not been for shortages of some components.
Both Gartner and IDC have put Acer in second place in the PC market, but that's in units sold. Dell is far larger than Acer in terms of pure dollar revenue. That's because Dell sells server, storage systems and has a services business. Acer, a pure consumer play, has none of that.
And it looks like the company plans to keep that consumer focus. Acer has grown thanks to acquisitions of Gateway and Packard Bell and by focusing on the consumer market, particularly with netbooks. Gianfranco Lanci, the company's president and CEO, said the firm expects more growth from netbooks.
Acer estimates sales of netbooks could reach 40 million units next year, easily surpassing the 25 million to 30 million units shipped this year. "The US is by far the best country in the world for the netbook," said Lanci at the company's investor conference in Taipei, Taiwan.
Lanci is also the most bullish on the long-awaited PC refresh cycle that everyone from Intel (NASDAQ: INTC) to HP (NYSE: HPQ) has been talking about optimistically. He expects laptop sales will return to 25 percent to 30 percent year-on-year growth, thanks to Windows 7 "reducing the perception gap with Mac OS." The growth of netbooks won't hurt notebooks, either. Rather, they will provide additional sales in Lanci's view.
Going forward, the company said that the majority of its sales will still go to consumers, but education and small business will continue to grow. Average selling prices will slow as unit sales recover and the dollar stabilizes.
Acer is not too thrilled with the new consumer ultra-low voltage (CULV) laptops that Intel has released. To get a chip in these extremely thin designs, CULV processors have to run very cool. That means dialing back the clock frequency. Apparently, Intel dialed it back a little too far for consumers' tastes. The company said it would release new laptops in the first quarter of next year with better performance.
Acer expects fourth quarter notebook and netbook shipments to grow 10 to 15 percent sequentially over the third quarter, but could drop back by 15 percent quarter-to-quarter in the first quarter.
Its smartphone plans remain unchanged. The company said it remains on track to sell 10 million units by 2012.