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]