updated 10:55 pm EST, Wed December 7, 2011
Acer chief to avoid PC race to the bottom
Acer in a discussion surrounding the company's global internal meeting confirmed a broader switch away from its traditional budget base towards ultrabooks. CEO JT Wang told Dow Jones that the ultra-thin PCs, which owe their existence to the MacBook Air, would be the "key growth driver" in 2012. The Taiwan firm said it would stop participating in what's often referred to as the race to the bottom, or an obsession with price and sheer market share among Windows PC makers that leads to sacrifices in build quality and sustainable profit.
"We will shift our strategy to improving profitability from pursuing market share blindly with cheap and unprofitable products," Wang explained.
The negative effects of the major company restructuring that was leading to the 2012 shift was almost done, he added. In all, Acer expected to ship about 10 percent more PCs in 2012 than it did this year and, through higher-margin hardware, to return to profit. Developing countries were "strong" and could help Acer tap into growth that had flattened out elsewhere.
Acer's shift to ultrabooks is an acknowledgement that Apple disrupted much of its strategy in 2010 and 2011. Netbook and cheap notebook sales started declining almost as soon as the iPad was available in April 2010, but key executives at or associated with the company have often insisted that the iPad would disappear at any moment and that Acer could simply continue focusing on low-end Windows PCs as usual. Successive losses followed for most of the year, even after the company slowly accepted tablets with its Iconia Tab line.
In a reflection of its change of heart, Acer now says tablets are vital and will focus on them at CES in January.