Acer wants to grow operating margins in Southeast Asia

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BEIJING: After successfully growing its market share in Southeast Asia to be the leading computer company in the region, Acer Inc is looking to grow its operating margins there.

“Southeast Asia is a very important market for us because we are number one there. Malaysia is even more important because we are number one in the whole PC (personal computer) and mobile products (market) with more than 30% market share.

“I think in Malaysia, we need to grow the margins since we are already number one there,” CEO and president of Acer Inc, Gianfranco Lanci said in a press conference here.

According to data provided by the company, Acer has a 34% market share in the local notebook market and 27.8% in the PC market.

Acer Inc is among the world’s largest computer companies with a global market share of 14.1%, second to Hewlett-Packard Co.

In the first quarter ended March 31, 2010, the group reported a 62.6% growth in profit after tax to NT$3.29 billion (RM338.4 million) from NT$2.03 billion in March last year. Revenue rose 36.1% to NT$162.1 billion from NT$119.1 billion previously driven by the increased demand for its mobile-based products.

Lanci said the notebook computer segment grew 19.4% and the PC segment 14%, enabling the Taiwan-based company to strengthen its number two position and close the gap with global leader Hewlett-Packard.

In the Asia Pacific region, Acer is among the top five vendors in the notebook and PC market. The Asia Pacific region contributed about 20% to group revenue and Lanci expects the percentage to be maintained this year. He noted that 5% of that was from China.

“The contribution (from the region) is quite good. Frankly speaking, in terms of operating margins, it is the best in the world, even better than India in terms of percentage.

“And we continue to see very big growth potential in the region especially in Australia and Japan,” he said.

Lanci believed that with the growth in countries such as China and Indonesia, the Asia Pacific region could potentially grow to the size of the US and EMEA (Europe, Middle East and Africa).

The EMEA market contributed about 50% to group turnover in 1Q10 while Pan America’s sales make up 27%.

Meanwhile, Acer Group CEO and Acer Inc chairman JT Wang said the company was confident of becoming the leader in total PC sales in two years time driven by quality content and user experience.

Acer had announced its clear-fi concept, which is designed to open up any home network and simplify the sharing of all kinds of digital content such as video, music and pictures across different platforms and systems.

Jim Wong, Acer’s president in charge of product development, said the company would be introducing several new products based on the clear-fi concept in the coming months.

The company noted that while revenue has been growing healthily, it can grow three times more with the incorporation of content into its products and it was looking to expand its sales as a content provider.

Acer also recently signed a cooperation deal between with China’s Founder Group to leverage on Founder’s comprehensive distribution network to sell Acer products in Chinese cities. The deal is expected to help Acer realise its plan to grab a 10% share of China’s notebook computer market by the end of this year.

Lanci said Acer currently has an 8% market share in China and sales there have come in below expectations as it had not understood the local market.

“The reason we were not successful in the past is because China is a very specific market. We overestimated the China market. If we want to leverage in China, we need a partner. We also didn’t understand the Chinese set-up. But we want to see how we can become number three within the next 20 months,” he said.

This article appeared in The Edge Financial Daily, May 27, 2010.