Acer, recently the world’s second-largest shipper of PCs, has had a rough year. But in March a deliberate decision was made by upper management to abandon their goal of dethroning HP and instead focus on making better, more distinguishable products. The result: sales and revenue in freefall. At least they knew it was coming — but losing millions of customers and a huge proportion of your worth isn’t something any company likes having to do.
The company is taking heavy losses — twice as heavy, in fact, as Reuters’ analysts estimated. 6.79 billion Taiwanese dollars (Around $250 million) went down the drain in Q2. That’s their biggest loss ever and the first time they did worse than they forecast. The results indicate that, as Acer’s chairman J.T. Wang admits, “trying to break even this year becomes impossible.” But I doubt they were planning on turning the whole company around in less than a year.
Despite the losses and job cuts, Acer remains stoic. They feel the tablet “fever” is lessening and people will return to notebooks (I’m not sure I agree). And while it’s unlikely that they have any interest in (or ability to) buy HP’s PC business, Acer’s president Jim Wang did comment that spinning it off was a natural thing for HP to do. He added, cryptically, that Acer would be working to satisfy its customers’ needs, “including HP’s existing customers.” What a thing to say! Again, though, with billions in losses every quarter, the last thing Acer needs is a $10 billion millstone around its neck from HP.
What he probably meant was that Acer may be stepping into HP’s shoes during the confusion. If they can stabilize fast enough, then while HP’s Personal Systems Group is in handoff mode, Acer can sweep in and carry off a few million customers. But before that happens, expect more bad news.
(Updated to reflect the fact that the 6.79 billion figure was in Taiwanese dollars. Very dumb of me not to catch that when a $7bn loss would likely bury the company)