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Acer to "overhaul operations" in the wake of Apple's iPad

post #1 of 48
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The founder of Acer, the second largest PC maker globally, has acknowledged that the company must overhaul its operations to focus on profit margins rather than market share in reaction to the success of Apple.

A report by China Economic News stated that Stan Shih, founder of the Taiwan PC giant, made his comments after two quarters of downward revisions of sales targets.

Acer just released new outlook calling for a ten percent decline in sales over the next quarter, rather than its original estimate of three percent growth. That announcement sent the company's stock down seven percent, the daily limit for the market, for two days in a row.

The report noted that Acer "has been striving to become the world`s largest PC vendor, in the belief that the goal can help it achieve economy of scale and garner higher margin."

Acer had invested in netbooks particularly, achieving rapid growth in its PC sales via volumes of the low-cost mini notebooks hit hardest by the arrival of Apple's iPad last summer. Hype around netbooks has since nearly vanished.

Shih added that the 'honor of the world`s largest PC vendor may be achieved at the expense of profit margin,' and suggested that the PC industry "should not single-mindedly pursue volume growth, and should extend its operation to the field of service, just like what Apple has done," according to the report.

Competitors hate Apple's iPad, iOS

Last fall, Acer's chairman JT Wang predicted that Apple's share of the tablet market would plunge from near 100 percent to just 20 to 30 percent because of the "closed platform" of Apple's iPad iOS, noting confidence in Android in saying that it "simply need a little more time before it turns strong."

HP and Dell recently made similar remarks assailing the iPad and Apple's iOS, while Microsoft's chief research and strategy officer Craig Mundie described the iPad as possibly being a short-lived fad positioned between smartphones and portable computers.

Both Gartner and IDC ranked Apple fifth in US PC Shipments in the fourth quarter of 2011 based entirely upon Mac sales alone (which made up 8.7 to 9.7 percent of the PC market, according to the two firms).

When adding in iPad sales, Apple became the top US vendor at the end of 2010, with 24 percent of all US PC sales, and enters striking distance of Acer and Dell for the number two PC spot globally.

Apple continues to essentially own the "media tablet" market, even when low cost devices such as dedicated ereaders are mixed in, creating consternation for both PC makers and general consumer electronics makers.
post #2 of 48
Apparently they didn't get the Microsoft memo about the post-PC era being "the room"

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post #3 of 48
I see we have another flummoxed one (I hope Ireland won't oppose to my use of Steve Jobs' exclusive word.)
post #4 of 48
Remember when certain people said the netbook market was strong and that tablets running mobile OSes couldn’t possibly dent a market with tablets or netbooks because they ran a full OS, not a “toy” OS? I sure do.
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post #5 of 48
What these companies don't take into consideration is that iPad is not just gonna stay the same. Yes the original iPad will not last for 5 years and become the true computer. iPad will evolve with the consumer needs.

All these companies are competing with single product and can barely overtake it. They're not looking at the system as a whole, that's the true competitor. It's the Apple's eco-system. And with the future of iMac and iOS this is only going to become harder and harder to compete against.

Only Google has some sort of advantage and true competition with Apple because they too have their own very popular eco-system. But they are all over the place and can't focus on key elements.
Apple had me at scrolling
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post #6 of 48
Quote:
Originally Posted by solipsism View Post

Remember when certain people said the netbook market was strong and that tablets running mobile OSes couldn’t possibly dent a market with tablets or netbooks because they ran a full OS, not a “toy” OS? I sure do.

Ugh. Mis-read your post.
post #7 of 48
I sure do. You don't see any of the netbook advocates around anymore.

Netbook market didn't work precisely for the reason many of us said it wouldn't. A desktop OS on a tiny under powered computer was the worst of both worlds.


Quote:
Originally Posted by solipsism View Post

Remember when certain people said the netbook market was strong and that tablets running mobile OSes couldnt possibly dent a market with tablets or netbooks because they ran a full OS, not a toy OS? I sure do.
post #8 of 48
Isn't everyone overhauling now? I mean, who is even close to achieving what iOS has achieved?

It'll be years, if ever, that the Apple eco-system will be challenged. Remember, as long as you stay at the intersection of Liberal Arts Avenue and Technology Street, you can't lose.

@felixbrenner
post #9 of 48
Quote:
Originally Posted by solipsism View Post

Remember when certain people said the netbook market was strong and that tablets running mobile OSes couldnt possibly dent a market with tablets or netbooks because they ran a full OS, not a toy OS? I sure do.

Funny, that crossed my mind just a few minutes before I read your post. They were quite vehement. Tablets were just netbooks, but crippled. Tablets had no reason to exist. Big iPod Touch. Cheap, crappy netbooks were the future of popular computing and it was going to destroy Apple once and for all (or Apple absolutely had to Respond To The Netbook Challenge immediately or be rendered irrelevant).

And a lot of the people who were very strident on that count are still posting here now, and they've just moved on to being strident about something else without a second's acknowledgement of how wrong they were. For the most part they just seamlessly transitioned to championing Android tablets as if they had always been fans of the format.
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post #10 of 48
I've heard it so many times..."We're losing money on every unit we make. Err, never mind we will make it up on volume!" Sheez.

Stevo has given them the formula for success, control the manufacture of hardware and the software for the best experience for the user.

90% of the companies where the founder leaves the CEO spot and an outside CEO is hired, eventually fail. Coco-Cola, MacDonald's, Ford, etc., are the exceptions.

Most CEO's and their executive teams are idiots. Perfect example is Verizon's CEO who passed on the iPhone. What a tool.

Best
post #11 of 48
Translation: "We bungled our business model. Apple is right. We are wrong. Sorry, shareholders."
post #12 of 48
Quote:
Originally Posted by christopher126 View Post

90% of the companies where the founder leaves the CEO spot and an outside CEO is hired, eventually fail. Coco-Cola, MacDonald's, Ford, etc., are the exceptions.

While I haven't heard of this MacDonald's you speak of, all companies had bad times when they transitioned from CEOs of one vision to another. McDonalds in particular had several years where they were trying to re-invent themselves (90's).
post #13 of 48
The problem with the low margin high volume model is that inevitably drives a given market in commodity hell, at which point there's always going to be someone in a global economy that go even cheaper. Sri Lanka rising.

Acer used to be the cheap upstart, now they're being undercut in the market they helped create. Good luck changing gears and having anyone take you seriously as a value added vendor, however. Dell, the original price cutter, really hasn't had much luck with premium branding, because they spent all those years establishing themselves as cheap but serviceable. Why would anyone want to buy higher margin kit from Acer? It would be like a gourmet menu at McDonald's.
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post #14 of 48
What is next? The only things that really need to improve in theses devices are speed and size.

Right now there is the tiny iPod Nano music player with a touch screen that has limited capabilities. Screens can't get smaller than that. IPod Touch units just need more storage and programs. Something that small is about the limit of touch screen devices that are functional for more than music reproduction.

The iPad will become a stand alone computer within a year and a half. It needs to break free of iTunes.

Desktop computers won't go away. The functionality of a Mac Pro will eventually be stuffed into a Mac Mini size package. Even that might get stuffed into the back of an extremely thin iMac screen. All of that will be blended into large screen TVs that come with WiFi or whatever flavor of wireless connectivity is available.

Cable TV will die if the ISPs are restrained from creating data limits. The iPad computers will be all in one devices that can wirelessly access streaming data and port it to TV screens.

Can Acer do these things?

Will Acer's new plan to offer better service help them to grow? First they need to make products that aren't cheap and require customer service. Read the reviews of their products on Amazon dot com. When something goes wrong there is no service at all. It will take a huge change in their customer service management to achieve better customer service.

Even if Acer succeeds at mimicking the things Apple creates they have a long way to go in turning around a global customer service problem. If I were to ever buy an Acer product, it would come from a local computer store that guarantees service. Otherwise I'd stay away from their products until their customer service problem is handled.
post #15 of 48
Why would you even try being the biggest pc vendor in the world? That is an outdated construct. The pc is nothing but Windows xyz tossed up its a$$ and mass produced.It is cheap and flipping disposable.
I have a feeling that the ipad will go pro and if that happens all hell will break loose, again. And GOD can you imagine if Apple did a stylus for the ipad? Jesus!!!!
I would go back to elementary school! I believe Apple is the only outfit that can do a stylus for ipad that can be as close to writing on paper as possible. And the apps for that!
ANOTER GOLD RUSH!
Screw the courier, MS, MSI, Acer etc folks. Apple has set a road map for the next effing decade!!!
post #16 of 48
Quote:
Originally Posted by christopher126 View Post

Most CEO's and their executive teams are idiots. Perfect example is Verizon's CEO who passed on the iPhone. What a tool.

Cingular's CEO (AKA Mr. Notecard) didn't seem to be the sharpest tool either.
post #17 of 48
...who'da thunk profit margins would be important?
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post #18 of 48
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Originally Posted by TokyoJimu View Post

Cingular's CEO (AKA Mr. Notecard) didn't seem to be the sharpest tool either.

My guess is that most of these CEOs got hired because they used the catchiest buzzwords: monetize! operationalize! outside-the-box thinking! paradigm shift! SYNERGY!!! vertical integration!! mindshare! ideation! future-proof! and last, but not least... BLEEDING EDGE!!!
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post #19 of 48
Quote:
Originally Posted by maccherry View Post

Why would you even try being the biggest pc vendor in the world? That is an outdated construct. The pc is nothing but Windows xyz tossed up its a$$ and mass produced.It is cheap and flipping disposable.
I have a feeling that the ipad will go pro and if that happens all hell will break loose, again. And GOD can you imagine if Apple did a stylus for the ipad? Jesus!!!!
I would go back to elementary school! I believe Apple is the only outfit that can do a stylus for ipad that can be as close to writing on paper as possible. And the apps for that!
ANOTER GOLD RUSH!
Screw the courier, MS, MSI, Acer etc folks. Apple has set a road map for the next effing decade!!!

As a first step in that direction, People are doing it already.
post #20 of 48
Quote:
Originally Posted by Suddenly Newton View Post

Apparently they didn't get the Microsoft memo about the post-PC era being "the room"

He makes too much sense , must not have gone down u der.
post #21 of 48
Quote:
Originally Posted by Felixer View Post

Isn't everyone overhauling now? I mean, who is even close to achieving what iOS has achieved?

It'll be years, if ever, that the Apple eco-system will be challenged. Remember, as long as you stay at the intersection of Liberal Arts Avenue and Technology Street, you can't lose.

@felixbrenner

You apparently missed the guy in the other thread who explained tomus why iOS is already dead.
post #22 of 48
Quote:
Originally Posted by maccherry View Post

Apple is the only outfit that can do a stylus for ipad that can be as close to writing on paper as possible.

who wants a stylus to writing? Drawing, maybe. But show me someone who can write faster by hand than can type on a keyboard. It's not worth the effort to develop/implement truly good handwriting recognition software.
post #23 of 48
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post #24 of 48
Quote:
Originally Posted by MacRulez View Post

Actually, netbooks are still enjoying double-digit growth, as they have every year since they were introduced. In the last year alone, while those who get their news from Mac sites kept saying netbooks are dying, the rate of growth was more than 28% - more than double the rate of growth for traditional laptops like the kind Apple sells:

http://www.computerweekly.com/Articl...book-sales.htm

Sure, the new kid on the block, the tablet form factor, is growing at a much faster rate, and so the rate of growth for netbooks is lower than it was in its former peak as the leading sector. But don't be misled by the Diglers of the world: the fact is that there is indeed a place for netbooks, as their ever-increasing sales clearly demonstrate.

Just because Apple customers don't have one doesn't mean no one else does either. It's a big world out there beyond the Apple store.

I'll never understand why so many of Apple fans believe that the whole world has to buy only what they buy....

That 28% rise is an estimate for '11, by one analyst. Another (IDC) predicts actual declines in worldwide unit sales and reports that unit sales for the '10 holiday quarter the US declined 34% YoY.

I think when they tally up the numbers for 2011 we'll see real declines in netbooks unit sales, not just loss of market share.
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post #25 of 48
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post #26 of 48
Quote:
Originally Posted by MacRulez View Post

No mater how you slice it, a lot of people enjoy netbooks. Just not those who shop at Apple stores. But the other 90% of the world? A good many of those folks like 'em.

People who shop at Apple stores enjoy netbooksperhaps you've heard of the MacBook Air? Or is that not a netbook because it costs more than $200 or will last more than a year? Or is it because it's capable of actually running the OS installed on it without burning up?
post #27 of 48
Quote:
Originally Posted by Mac-sochist View Post

People who shop at Apple stores enjoy netbooksperhaps you've heard of the MacBook Air? Or is that not a netbook because it costs more than $200 or will last more than a year? Or is it because it's capable of actually running the OS installed on it without burning up?

Its not a netbook because its not running a slow CPU like Atom that can barely get it access to the net. Its an ultra-portable ultra-slim notebook categories.
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post #28 of 48
Quote:
Originally Posted by MacRulez View Post

Good link - the chart there shows current actual netbook sales being more than twice that of tablets, with a gentle slope downward contrasting with their meteoric rise over the last several years:


Unless I'm misreading it, the chart appears to show end of 2010 tallies for yearly sales, rather than current sales. I think it's pretty predictable that we're well into that sharp rise at the moment.

Quote:
Sure, no trend lasts forever. But netbooks have had a very solid run, and while some analysts project continued growth even the naysayers, such as you managed to turn up, expect unit sales continuing in the tens of millions of units well beyond the end of the year.

The trouble being that unit sales in the tens of millions, tapering off and increasingly to less affluent markets, doesn't mean much in a world of hundreds of millions and rising tablet sales.

Quote:
No mater how you slice it, a lot of people enjoy netbooks. Just not those who shop at Apple stores. But the other 90% of the world? A good many of those folks like 'em.

I slice it this way: tablet sales are in the process of totally eclipsing netbooks sales, which is remarkable given the response to the iPad at release and the very recent notions of how netbooks were set to take over the world.

I'll say that again: until a little over a year ago, many many pundits were certain that netbooks represented the future of mobile computing, that Apple had no response, and even after the release of the iPad that it was no more than a curiosity, doomed to niche status.

And here we are. I'm not even sure what you think you're arguing for, but the fact that netbooks will retain some residual sales for a while doesn't change anything. And I have no idea why you think this all has to do with Apple people and their blinkeredness, since the facts are there for anyone to see.
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post #29 of 48
Quote:
Originally Posted by addabox View Post

I'll say that again: until a little over a year ago, many many pundits were certain that netbooks represented the future of mobile computing, that Apple had no response, and even after the release of the iPad that it was no more than a curiosity, doomed to niche status.

And here we are. I'm not even sure what you think you're arguing for, but the fact that netbooks will retain some residual sales for a while doesn't change anything. And I have no idea why you think this all has to do with Apple people and their blinkeredness, since the facts are there for anyone to see.

Here is how David Pogue opened up his iPad 2 review
Quote:
An utter disappointment and abysmal failure (Orange County Web Design Blog). Consumers seem genuinely baffled by why they might need it (Businessweek). Insanely great it is not (MarketWatch). My god, am I underwhelmed (Gizmodo).

People like MacRulez have gone from it will never sell, netbooks are superior in every way to so what if the tablet market is bigger, some people obviously like them since there sales are greater than zero.
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post #30 of 48
Quote:
Originally Posted by aaarrrgggh View Post

While I haven't heard of this MacDonald's you speak of, all companies had bad times when they transitioned from CEOs of one vision to another. McDonalds in particular had several years where they were trying to re-invent themselves (90's).

I believe he is referring to the MacDonald's that Eddie Murphy works at in the movie Coming to America
post #31 of 48
Quote:
Originally Posted by MacRulez View Post

Actually, netbooks are still enjoying double-digit growth, as they have every year since they were introduced. In the last year alone, while those who get their news from Mac sites kept saying netbooks are dying, the rate of growth was more than 28% - more than double the rate of growth for traditional laptops like the kind Apple sells:

That is a hopeful projection. The trend is clear.

Quote:
Sure, the new kid on the block, the tablet form factor, is growing at a much faster rate, and so the rate of growth for netbooks is lower than it was in its former peak as the leading sector. But don't be misled by the Diglers of the world: the fact is that there is indeed a place for netbooks, as their ever-increasing sales clearly demonstrate.

The iPad is selling in a way that netbooks never did. Netbooks did not grow a developer community around them. Sales projections of the iPad completely blow away projections of all netbooks combined. A hugely growing developer community is spurring around the iPad.


Quote:
I'll never understand why so many of Apple fans believe that the whole world has to buy only what they buy....

I don't see what being an Apple user has to do with acknowledging the uselessness of netbooks. I would still feel that way if i were a Windows user.
post #32 of 48
That was McDowells

Quote:
Originally Posted by Westnile View Post

I believe he is referring to the MacDonald's that Eddie Murphy works at in the movie Coming to America
post #33 of 48
Focus on better quality design, fewer product categories, fewer periodic updates of new products... people will always remember, respect and cherish a well refined product.

Less is MORE... same goes to dell, hp etc
post #34 of 48
Quote:
Originally Posted by MacRulez View Post

Actually, netbooks are still enjoying double-digit growth, as they have every year since they were introduced. In the last year alone, while those who get their news from Mac sites kept saying netbooks are dying, the rate of growth was more than 28% - more than double the rate of growth for traditional laptops like the kind Apple sells:

http://www.computerweekly.com/Articl...book-sales.htm

Sure, the new kid on the block, the tablet form factor, is growing at a much faster rate, and so the rate of growth for netbooks is lower than it was in its former peak as the leading sector. But don't be misled by the Diglers of the world: the fact is that there is indeed a place for netbooks, as their ever-increasing sales clearly demonstrate.

Just because Apple customers don't have one doesn't mean no one else does either. It's a big world out there beyond the Apple store.

I'll never understand why so many of Apple fans believe that the whole world has to buy only what they buy....



Did you read the article you cited? Here's an excerpt:

"The latest report by Canalys predicts tablet sales in 2011 to show over 5,000% year-on-year growth. But for every 10 tablets sold this year, five netbook or notebook sales will be lost in the enterprise market."
post #35 of 48
Quote:
Originally Posted by AppleInsider View Post

Shih added that the 'honor of the world`s largest PC vendor may be achieved at the expense of profit margin,' and suggested that the PC industry "should not single-mindedly pursue volume growth, and should extend its operation to the field of service, just like what Apple has done," according to the report.

Well, better late than never I suppose. Good luck doing that while relying on the "partners" who produce the operating systems you rely on who have conflicting goals with you.

I think it's just now sinking in for companies like Acer at just how screwed they are in the next wave of computing that Apple has unleashed with the iOS ecosystem.
post #36 of 48
Quote:
Originally Posted by MacRulez View Post

Actually, netbooks are still enjoying double-digit growth, as they have every year since they were introduced. In the last year alone, while those who get their news from Mac sites kept saying netbooks are dying, the rate of growth was more than 28% - more than double the rate of growth for traditional laptops like the kind Apple sells

Hmm, channel stuffing or real sales? And are they even really stuffing the channel? For the last year my local Costco has had no fewer than five netbooks to choose from. Now? Two.

They do have the Xoom now

Netbooks are dead. When I can get an iPad for the same cost, it's a no brainer as to which makes more sense.
post #37 of 48
So it took Apple making more in net income in calendar 2010 than Acer had revenue to prove to them that operating model built on margins might work?
Acer's net margins were <2.5% in 2010. Bravo Acer, bravo.
post #38 of 48
If netbooks are a race to the bottom, then congratulations, Acer. You've reached the bottom. How do you like it down there?

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #39 of 48
It is a amazing the generic cloners are just figuring this out. Acer is a generic clone maker. they have nothing to differentiate themselves from the other cloners...Dell, HP, Lenovo, <insert generic cloner>. There is simply no way to increase margins in the generic cloner market without going out of business. The generic cloners have to split pennies to make money after they send massive checks to Microsoft for Windows, Office, etc...
post #40 of 48
So here we have Microsoft's "room" with top guys from Microsoft, Dell, HP and Acer standing around in it. The smell would gag a maggot because every one of them crapped his britches thinking about what the iPad is doing to his business. All of them are still in denial except the Acer guy who admits he dropped a load in his pants and is going to change his underwear.

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