New Acer CEO disappoints with lack of detail on future plans
TAIPEI (Reuters) - Investors looking for specifics as to the future of Acer Inc, the world's No.4 PC vendor, came away disappointed when the new CEO spent more time delivering a history of the company's past mistakes than on where it was headed.
Jason Chen, the latest executive to step through the revolving door to the CEO's office, said during his first press conference on Monday that the Taiwanese company's biggest mistake was investing too early in touch-panels and ultrabooks and not realizing the extent to which tablet computers like Apple Inc's iPad would disrupt the PC industry.
"We wanted to stimulate demand using new technology and we took the initiative more aggressively than anybody else, to the point where we got hurt," Chen said. "Hopefully we won't repeat the same mistake we made before."
Chen is the latest appointment in a series of top-level shake-ups at the struggling firm. In 2011, Italian-born Gianfranco Lanci resigned as CEO and in November, then-CEO J.T. Wang also resigned to be replaced by then-corporate president Jim Wong. Wong, however, stepped down only weeks later.
Acer has been struggling with losses for several quarters, including a T$13.12 billion ($437.98 million) deficit in the third quarter of 2013. In a sign of turmoil shaking the industry, rival Dell made waves early last year when it announced it would go private in a buyout led by founder Michael Dell.
Acer hasn't been able to successfully move into the higher-profit enterprise PC sector, a move that has started to pay off for Hewlett-Packard Co, which reported revenue that beat expectations in the third quarter. Lenovo Group Ltd, the world's No.1 PC manufacturer, also saw rising profit as it adjusts strategy in the face of a shrinking consumer base.
According to data from research firm IDC, Acer saw a 21.4 percent fall in PC sales during the fourth quarter from a year earlier, by far the largest of all major vendors. At its peak in the third quarter of 2009, the company occupied a 13 percent share of the worldwide PC market.
Angela Hsiang, a Taipei-based analyst at KGI Securities, said she didn't really expect concrete details from Chen's presentation, but what she did see didn't make her more optimistic about the company's future.
"It'll be hard to see a turn-around for Acer this year," Hsiang said. The "first half is basically impossible, while in the second half it may start to bottom out since the reshuffle will have been going on some time by then."
Acer last month named former Taiwan Semiconductor Manufacturing Co Ltd sales executive Chen its new CEO as of January 1, while founder Stan Shih returned to the company in November as chairman.
Chen, 53, has been tasked with guiding the company to integrate hardware, software and services and push deeper into the fast-growing tablet sector as PC sales stall.
Hsiang, who predicts a full-year loss in 2014 for Acer, said her understanding is that Chen wants Acer to have more exposure in software, "but the company wasn't able to give any concrete strategy on how they're going to develop in the software business."
In tablets, the company has made some inroads, seeing its global market share increase to 2.5 percent in the third quarter of 2013 from less than 1 percent in the same quarter of 2012.
Analysts fear more challenges ahead and more declines for a stock that has fallen 82 percent from its peak in January 2010.
Vincent Chen, an analyst at Taipei-based Yuanta Securities, said that the company needs to escape from the ultra-low-growth, low-margin consumer PC sector.
"They need to elevate their brand position, which has really killed them," Chen said. "Acer's gotten stuck in the low end of the market."
(Additional reporting by Clare Jim; Editing by Matt Driskill)
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