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Acer profit falls 64% in wake of iPad effect, may drop again

updated 09:40 am EDT, Fri April 22, 2011

Acer Q1 2011 sees profit freefall due to Apple

Acer on Friday reported its lowest profit in over six years in what was largely a validation of estimates that it had been damaged by the iPad. Its net income dropped 64 percent to the equivalent of just over $41.53 million, the lowest the company had seen since spring 2004. The company also warned that its troubles weren't over and that its shipments might drop for the third quarter in a row for spring.

The company is known to have been rapidly losing ground in the notebook market as buyers picked up tablets, usually the iPad, in place of either netbooks or low-end notebooks. Acer's management repeatedly denied the effect and often tried to insist that the iPad was a fad that would disappear within a few months at most as customers returned to dutifully buying netbooks. About 73 percent of its lineup's revenue is based around notebooks, with desktops and mobile devices just small fractions of its income so far.

A realization that the iPad was around for the longer term led Acer to oust its CEO Gianfranco Lanci and undertake a large-scale reorganization that put a greater emphasis on phones and tablets. The lower outlook for spring 2011 reflects the tail end of its former CEO's strategy, where it began investing in tablets but had only a handful of models planned for the spring. [via Bloomberg]



By Electronista Staff
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  1. Paul Huang

    Mac Enthusiast

    Joined: Sep 1999

    +11

    profit gone south along the river of denial

    Their pad will carry them further south.

  1. DeezNutts

    Fresh-Faced Recruit

    Joined: Apr 2008

    +8

    netbooks?


    Were netbooks that big of a market to begin with?

    I have never seen one in use, and do not know a single person who bought one.

    I know acer was a big supplier of the devices, I just wonder where they were selling so many to begin with!

  1. climacs

    Forum Regular

    Joined: Sep 2001

    +10

    Baghdad Bob worked at Acer til recently

    "we are crushing the American crusaders and driving them into the Tigris River!" or some such nonsense like that, got him a job at Acer apparently.

    lying and spinning is not unusual for corporate America but outright denial of reality is quite something else...

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    +14

    This is the company that called the iPad a

    temporary fad and that some useless device would never succeed against a really useful Windows netbook. The company is truly run by myopic jackasses whose shareholders should string them up and have the company executives flogged. The Windows netbook was one of the worst computing platform ever devised. It was never meant to be a hardware platform for Windows OS. It would have been a *nix platform for struggling third-world countries that couldn't afford the most expensive hardware. Instead, companies started peddling that cheap junk to cheapskates in developed countries. Netbooks were cheap and that's why people bought them. Not because they were good at anything in particular. Those Wintard netbook fanbois should take a full assessment at how valuable the netbook really is to consumers by looking at Acer's sales. It's nothing but a cheap version of a costlier but decent Windows notebook.

  1. SockRolid

    Forum Regular

    Joined: Jan 2010

    +4

    Inevitable. Acer never had a chance.

    Let's say Acer could see the future 2 years ago. They would have started making pads back then to try to prepare for the "iPad effect." And they would have failed. They would have been forced to ship pads with Windows, and we all know how poorly Windows pads sold for 10 years.

    Let's say that Acer could instantly change their product mix to whatever they wanted (other than making iPads themselves) by snapping their fingers. They would instantly start shipping pads with yes, you guessed it, Honeybomb. And that's still a pre-beta quality project. Acer still fails to make any significant sales.

    Acer was doomed then, they're doomed now, and nothing could have prevented that.

  1. Foe Hammer

    Fresh-Faced Recruit

    Joined: Feb 2005

    0

    It Must Be Only Temporary. It Just Has To Be. :-)

    I'm sure this whole "drastically lower earnings" thing is just a fad and that Acer will soon return to its senses and decide it wants to be more profitable again.

    I mean what other conclusion can you come to, especially now that Acer is really thinking with its Wang?

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