Acer Aspire S5

Acer loses money in Q2 amidst rising R&D and memory costs

Taiwanese PC maker Acer reported a net loss in the second quarter, attributing it to the company's growing investment in product design and the recent rise in DRAM prices.

Acer's net loss was NT$343 million ($11.4 million), down from a profit of NT$56 million in the same period a year ago. Revenue for the quarter declined year-over-year by a little over 19 percent, reaching NT$89.4 billion.

During the quarter, Acer saw its PC shipments fall by 32 percent year-over-year, according to research firm IDC. This marked the biggest shipment drop among the world's top five PC vendors.

The company has struggled to lift its earnings amid a long slump in PC shipments, at a time when smartphone and tablet sales are surging. In the quarter, the company faced weak consumer demand for its PCs, including the company's higher-priced ultrabooks, according to IDC.

Acer currently holds about 8 percent share of the world's PC market and makes most of its revenue through notebook sales. But the company has tried to diversity its products. In June, at Taipei's Computex trade show, Acer showed off a 8-inch Windows 8 tablet and a 5.7-inch Android smartphone.

At the same time, the company is investing more in research to produce innovative products that can set itself apart from the competition. It is, for example, investing in the 'look and feel' and user interfaces of products.

Microsoft's Windows 8 OS has done little to help drive PC sales for companies such as Acer because of its weak reception, according to analysts. As a result, PC makers appear to be experimenting with bringing Google's Android operating system to the PC.

At Computex, Acer unveiled a 21.5-inch all-in-one desktop running Android. The product will arrive in September or October.

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