Acer and former CEO trade barbs over Apple's iPad threat

Posted:
in iPad edited January 2014
Acer and recently ousted ex-CEO Gianfranco Lanci exchanged heated words this week over who was to blame for a slump in unit sales after Apple's iPad began cannibalizing the low-end PC market.



Lanci resigned as CEO at the end of March, with several reports suggesting at the time that the adverse impact from Apple's iPhone and iPad successes was a "key reason" for his departure. According to IDC, Acer's U.S. PC shipments dropped by a 42.1 percent in the March quarter, opening an opportunity for Apple to overtake it with its 9.6 percent year over year growth in Mac sales.



In an interview with the Mobilized blog on Monday, Lanci blamed Acer for being too slow to react to the threat from the iPad.



"At that time, I already saw if we want to become a major player in this new world, we needed to do certain investments, mainly on software and on smartphones and tablets, on touch,? Lanci said. He had pressed the company to expand from 300 or 400 engineers to 1,000 engineers, focusing more on software and hardware integration.



The number of engineers Lanci required could not be found in Taiwan, so he suggested looking elsewhere: "China or India or even the U.S. or Europe, wherever you can find software resources, software know-how." However, Lanci said Acer was resistant to the change because it might result in a "de-Taiwanization" of the company.



?I said, ?Look, it is not de-Taiwanization,?? he said. ?It is just globalization. If we want to be in the top three (PC makers) in the next three to five years, we need to be a global company and we need to leverage resources wherever they are.?



Lanci admitted that the company was late in achieving its smartphone and tablet vision, but attributed the delay to a lack of resources, rather than his own shortcomings. "People after a few years will decide who was wrong,? he said, noting that the company had grown from a $10 billion company to a $20 billion one during his eight-year tenure.



Lanci also said Acer needed to do more to prepare for the rise of the "tablet thin and light, like the current iPad 2," the report noted. According to Lanci, Apple is clearly winning and Samsung and HP may be doing the right things, but the bulk of the PC industry faces a similar position as Acer.



For its part, Acer fired back at Lanci's comments on Wednesday, in a statement asserting that "de-Taiwanization" had never been the issue, DigiTimes reports. The company instead raised the issue whether Lanci had been "able to sustain healthily and long-term development for the company."



The Taiwanese PC maker pointed to smartphone failures under Lanci and the resulting inventory pile-up and accounts receivables problems, according to the report.



"Lanci had also failed to come out with explanations earlier when the company was unable to deliver results that matched up with its targets in two consecutive quarters from October 2010 to March 2011," Acer noted.



Acer took issue with Lanci's claim that the company's capabilities weren't up to the task of building a tablet, highlighting instead the fact that its Android 3.0 tablet PCs trailed behind only Apple and Motorola when they began shipping.



Last year, Acer chairman JT Wang predicted that the market share of the iPad would drop from 100 percent to between 20 percent and 30 percent as competitors entered the market. However, after sales and profits slowed at the end of 2010, founder Stan Shih announced that the company would overhaul operations to more closely emulate Apple's strategy.



Acer had previously pursued a volume strategy, "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," according to one report. However, the race to the bottom with the rise of the netbook resulted in vanishing profit margins, which disappeared even further as Apple's iPad began to eat into netbook sales.



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," Shih said.
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Comments

  • Reply 1 of 31
    quinneyquinney Posts: 2,525member
    If Lanci is trying to make himself look better by blaming other people for Acer's shortcomings, he is not succeeding.
  • Reply 2 of 31
    quadra 610quadra 610 Posts: 6,744member
    Clueless as ever.
  • Reply 3 of 31
    daylove22daylove22 Posts: 215member
    Quote:
    Originally Posted by Quadra 610 View Post


    Clueless as ever.



    Bottom line is that no one can compete with Apple products.
  • Reply 4 of 31
    res1233res1233 Posts: 18member
    Quote:
    Originally Posted by daylove22 View Post


    Bottom line is that no one can compete with Apple products.



    Yep. Apple often charges more for its products than its competitors, but you get what you pay for. If Acer or Dell were to start charging the same as Apple did, even if they made their computers of comparable quality, people would start looking towards Macs more than they do already, because they would still fall short where the OS is concerned. PCs are for people with a VERY tight budget. Most people can afford a base model macbook air at the very least though...
  • Reply 5 of 31
    nobodyynobodyy Posts: 377member
    Quote:

    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," Shih said.



    +1

    Apple has been doing things right with their strategy, I'm surprised more companies aren't emulating it and while the risk (of change) remains high, the current models aren't proving too successful.
  • Reply 6 of 31
    mhiklmhikl Posts: 471member
    Quote:
    Originally Posted by Nobodyy View Post


    +1

    Apple has been doing things right with their strategy, I'm surprised more companies aren't emulating it . . . .



    They can emulate till the cows come home but Apple will always be steps ahead while the emulators spend themselves into the ground.
  • Reply 7 of 31
    Acer doesn't know jack! So they want to go from a bottom feeder (ie cheapest PC, lowest cost, no brand value, market share is everything) and emulate Apple's model? Those are hugely different skillsets and the entire company would need to be overhauled, not to mention the years it would take to get that culture implemented. Acer thinks they can just flip a switch and do it. What a bunch of morons! Like they think they could actually duplicate Apple's secret sauce for success. Stick to what you know best Acer, and that is to make cheap, low cost products.
  • Reply 8 of 31
    _hawkeye__hawkeye_ Posts: 139member
    Quote:
    Originally Posted by AppleInsider View Post


    Apple's iPad began cannibalizing the low-end PC market.



    @AppleInsider: The definition of cannibalizing is to eat one's own kind. Predation is the word you're looking for.
  • Reply 9 of 31
    sflocalsflocal Posts: 4,651member
    Quote:
    Originally Posted by Jumpmaster View Post


    ...Stick to what you know best Acer, and that is to make cheap, low cost products.



    That is what Acer's been doing. Now, here comes Apple's iPad with a low(er) price with better quality overall, both in terms of hardware and software, and it finds itself unable to compete.



    When people can buy a Mercedes for the price of a Kia, it becomes a no-brainer with who will win.
  • Reply 10 of 31
    realisticrealistic Posts: 1,141member
    Quote:
    Originally Posted by sflocal View Post


    That is what Acer's been doing. Now, here comes Apple's iPad with a low(er) price with better quality overall, both in terms of hardware and software, and it finds itself unable to compete.



    When people can buy a Mercedes for the price of a Kia, it becomes a no-brainer with who will win.



    +1 hard to argue with this truth.
  • Reply 11 of 31
    eacummeacumm Posts: 92member
    Quote:
    Originally Posted by res1233 View Post


    Yep. Apple often charges more for its products than its competitors, but you get what you pay for. If Acer or Dell were to start charging the same as Apple did, even if they made their computers of comparable quality, people would start looking towards Macs more than they do already, because they would still fall short where the OS is concerned. PCs are for people with a VERY tight budget. Most people can afford a base model macbook air at the very least though...



    Sorry but Mac's are PC's (Personal Computer) there just a million times better.
  • Reply 12 of 31
    myapplelovemyapplelove Posts: 1,515member
    Quote:
    Originally Posted by _Hawkeye_ View Post


    @AppleInsider: The definition of cannibalizing is to eat one's own kind. Predation is the word you're looking for.



    Good point.



    Pretty boring squabbling this story, and from people unremarkable enough to not care about. Hadn't the Acer guy some 9 months or so ago, come up and said we wont be competing in tablets so far, cause we cant undercut apple's prices? I liked him for being upfront and doing the only thing he could, not compete.



    If the bozos of the company dont understand that as tech gets cheaper and better you won't,you can't consistently undercut it with second rate yet cheaper models, which has always been the acer way, and of course it's not the CEO to blame for falling profits.
  • Reply 13 of 31
    Quote:
    Originally Posted by AppleInsider View Post


    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," Shih said.



    This is just a steaming pile of a quote .... from the Acer Founder. So now they wanna be like Apple? Get serious. Like somebody pointed out it's a different set of skills and the hardest skill to change is going to be the Vision from the top. That's what drives Apple's success, and what drives other companies into the ground.



    For what it does Acer it's a decent company, but to do what Apple is doing? No way. They'll get new executive management, take a luxurious retreat somewhere to come up with a new "Vision", come back with some gleaming plan filled with industry/MBA buzz words, that will be sabotaged across the board by daily operational concerns, entrenched departments & general corporate culture. Seen it all before. Acer ain't gonna change a dang thing.
  • Reply 14 of 31
    granmastakgranmastak Posts: 298member
    The likes of Acer and Asus and what not, have no real marketing strategy. They are just leaches basing their whole existence on smaller margins and volume sales of cheap knockoffs. Problem is, they don't control their own destiny, the primary players do. If HP stagnates, they do too.



    Nobody in the world says yeah! I'm going to buy an acer today... It's more like, I got this pc for $399, not a bad deal.



    The well ran dry with tablets since they could have only copied successful HP or motorola models, and those just don't exist. Both their board and the ousted CEO are big losers for not having any original ideas.
  • Reply 15 of 31
    anantksundaramanantksundaram Posts: 19,221member
    Quote:
    Originally Posted by _Hawkeye_ View Post


    @AppleInsider: The definition of cannibalizing is to eat one's own kind. Predation is the word you're looking for.



    One can self-cannibalize (as opposed to cannibalize).
  • Reply 16 of 31
    MacProMacPro Posts: 18,292member
    Quote:
    Originally Posted by Granmastak View Post


    The likes of Acer and Asus and what not, have no real marketing strategy. They are just leaches basing their whole existence on smaller margins and volume sales of cheap knockoffs. Problem is, they don't control their own destiny, the primary players do. If HP stagnates, they do too.



    Nobody in the world says yeah! I'm going to buy an acer today... It's more like, I got this pc for $399, not a bad deal.



    The well ran dry with tablets since they could have only copied successful HP or motorola models, and those just don't exist. Both their board and the ousted CEO are big losers for not having any original ideas.



    So true. There isn't a singe company among them that actually has the capacity to innovate since they never have, the word isn't even in their vocabulary. Let's not forget either that even the snake's head, Microsoft, that spawned all of them ripped off the Mac OS. So even at the heart of a product from their world there is zero innovation, just more ripped of IP.



    It's as if the entire PC world just woke up and realized that for the last several decades they have been making dodos and wooly mammoths and guess what ... ?
  • Reply 17 of 31
    maccherrymaccherry Posts: 924member
    Acer is dead like most in the pc industry.
  • Reply 18 of 31
    island hermitisland hermit Posts: 6,217member
    Quote:
    Originally Posted by AppleInsider View Post


    However, Lanci said Acer was resistant to the change because it might result in a "de-Taiwanization" of the company.



    fear of de-Taiwanization of the Company.



    Gianfranco Lanci



    It's obvious why he was fired...
  • Reply 19 of 31
    brucepbrucep Posts: 2,823member
    Quote:
    Originally Posted by maccherry View Post


    Acer is dead like most in the pc industry.



    Acer sell tons of products at a razor thin markup . Yet over the last 4 yrs they held the price but made most of there devices better .For $35 dollars I bought an Acer DVD player .It work s just the same as the $100 dollar model.



    Acer knocks on Dells door not Apples . Acer and Apple live on different worlds .





    9
  • Reply 20 of 31
    toppuratoppura Posts: 4member
    Quote:
    Originally Posted by digitalclips View Post


    So true. There isn't a singe company among them that actually has the capacity to innovate since they never have, the word isn't even in their vocabulary. Let's not forget either that even the snake's head, Microsoft, that spawned all of them ripped off the Mac OS. So even at the heart of a product from their world there is zero innovation, just more ripped of IP.



    It's as if the entire PC world just woke up and realized that for the last several decades they have been making dodos and wooly mammoths and guess what ... ?



    Hey, let's be fair here. Didn't Microsoft invent the talking paper clip?
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