ACER, THE Taiwanese PC maker, yesterday warned sales in the first quarter would fall short of expectations, highlighting the continued weakness in demand in Europe and the US and the growing popularity of new mobile devices such as tablets.
With just a week to go before the end of the quarter, the company said its PC revenues were 10 per cent less than in the fourth quarter, during which Acer had already suffered an 11 per cent year-on-year fall in revenues.
“We have been hearing about weakness in the US and European markets for some time but this is a confirmation of just how weak it is,” Jenny Lai, head of Taiwan research at HSBC, said.
“It also shows that tablets’ cannibalisation of the notebook and netbook markets is definitely happening.”
Amid increasing concern over the impact of the Japan earthquake on global technology supply chains, Acer’s statement is a reminder any weakness in global demand represents a far greater danger for most technology groups.
Acer’s decline over the past few months has left it struggling to maintain its position as the world’s second largest PC maker by sales against Dell, which is number three.
Hewlett-Packard is the world’s largest PC maker.
This shift partly reflects a cyclical change in the global PC industry.
While the immediate recovery from the financial crisis was driven by consumers buying slimmer notebooks and netbooks with a longer battery life, over the past year it has been corporate IT spending that has driven the PC market.
Consumer demand, which weakened as economic uncertainty in the United States and Europe persisted, meanwhile has turned to tablets and smartphones instead.
Gartner, the research consultancy, this month lowered its global PC shipment forecast for 2011 by 5 per cent to 387.8m units
Gartner cited weak consumer demand in China and growing competition from other mobile devices.
Acer has had only limited success in smartphones and initially adopted a wait-and-see strategy on tablets.
However, it achieved a breakthrough this week when AT&T became the first major telecoms operator to commit to selling Acer’s first tablet, the Iconia, this summer.
Acer said it expects second quarter shipments to be flat compared to the first quarter partly because “Acer started shipping tablet PCs in March, and will launch several new models in the second quarter to ramp up the unit shipment”.
Acer is likely not alone in having a disappointing first quarter.
February revenue numbers from the top contract PC manufacturers in Taiwan, who account for 90 per cent of global production, were all down roughly a fifth from January. Even Hon Hai, which makes Apple products and desktops for Dell, saw an 18 per cent decline.
– (Copyright The Financial Times Limited 2011)
