Acer needs to focus on brand building, tablets under new leaders

Acer will have to choose new leaders with expertise in tablets and brand-building to shed its reputation as a low-end seller of notebooks, analysts said.

Last month, the company abruptly canceled plans to name Jim Wong as its new CEO, and instead did away with the position. Company co-founder Stan Shih has taken over as chairman and president, but only temporarily, Acer spokesman Henry Wang said on Friday.

Shih is slated to step down as chairman in June when his term ends, and will hold the post of president until a suitable candidate is found, Wang said. “The CEO duties will be taken over by either the corporate president or chairman,” he said. “We have no timetable on choosing a president, but we are looking.”

The world’s fourth largest PC vendor, Acer has been struggling in recent years to lift its earnings. About 80 percent of its revenue comes from desktops and notebooks, but demand for PCs is falling as sales for smartphones and tablets continue to surge.

To revive its business, Acer may need to choose leaders from outside the company who understands mobile products, said Arthur Liao, an analyst with Fubon Securities Investment Services.

“The company has suffered in the past two years, because its executives have had a PC-focused mindset,” he said. “They spent a lot of resources on ultrabooks, netbooks, but the PC market is shrinking.”

Acer should instead focus on the tablet market, Liao said, an area of its business that’s growing, but accounts for only about 8 percent of its revenue. Based in Taiwan, Acer could target neighboring mainland China, where low-cost Android tablets are in demand.

For next year, tablet shipments will be close to surpassing the PC market in size, and reach 285 million units, according to research firm Canalys.

Other analysts believe Acer’s new leaders will need to build the company’s brand as a high-end maker of products.

“We’ve done many studies and people still perceive Acer’s brand as low-end PC vendor,” said Helen Chiang, an analyst with IDC. “Even when Acer comes out with high-end products, it’s still been hard for the company to change its brand image.”

Moving to the high-end will help Acer improve its profit margins, a direction rivals Dell and HP took years earlier with their focus on enterprise products. “It will probably take two or three years for Acer to turn this around,” Chiang added. “Acer has been late in moving outside PC products, and so is much more reliant on selling PCs when compared to its rivals.”

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