EXCLUSIVE: After Dropping A Bundle New Acer Management Is Now Winning Big Contracts.

Written by David Richards     23/06/2014 | 14:01 | Category: NOTEBOOKS & TABLETS

Acer Australia who are now under new management and have recently won several major supply contracts, is set to report a $47M loss for the year ending December 2013.

EXCLUSIVE: After Dropping A Bundle New Acer Management Is Now Winning Big Contracts.
The losses which racked up under the previous Managing Director Charles Chung include a $15.7m dollar payment to the Australian Tax Office for past royalty withholding taxes over a 10 year period, due primarily to the non-declaration of taxes relating to the installing of Windows OS software on PC's sold in Australia.
 
Several PC Companies are believed to be facing similar payments to the ATO after a two year investigation into the bundling of OEM Windows's licenses onto PC's in Australia. (See separate story here).
 
The loss also includes an $11.9M  top up to its warranty reserve in order to continue the support of its large Education Department business particularly for notebooks that did not stand up to what has been described as a "lack of care" by schoolchildren who after being given a free Acer PC returned them sometime later claiming that the devices had failed. 
 
Under the warranty agreement Acer had to take the risk on the devices sold which has resulted in a direct cost hit to Acer.
 
Acer claims that the devices that were built to meet a competitive price demanded by the departments, failed to live up to the treatment given to the devices by school children who often carried the devices in schoolbags between classes and home. 
 
Between January 2013 and December Acer reported revenues of $306M this was down from the prior year when the Taiwanese Company reported revenues of $322M. During this period the PC industry witnessed an overall downfall of between 15 and 20% according to IDC data. 
 
Back in January 2014 Charles Chung the previous Managing Director retired, since then under the new management of Managing Director Darren Simmons the former sales director at Acer the Company has won several significant contracts including the supply of thousands of Chrome notebooks to Woolworths who recently dropped Microsoft Office in favour Google's Chrome based Docs software. 
 
According to Woolworths chief information officer Daniel Beecham, 15,000 staff will be moved over to the Google Chrome offering which will run on Acer powered Chrome PC's. This will be followed by an additional 10,000 seats with up to 200,000 Woolworth's staff set to be moved over to the Google offering. 
 
The combination of Acer Chrome notebooks and the Google Docs licensing program is set to save Woolworths millions of dollars according to analysts.  
 
In another victory for the new management team Acer is back as a major supplier of PC's and monitors to Harvey Norman.
 
Under Chung Acer was kicked out of Harvey Norman but as soon as the Company was restructured with Simmons, a former Hewlett Packard executive taking the helm the Company saw their products re-ranged at the mass retailer. Acer PC's are also sold at JB Hi Fi, Dick Smith, Officeworks, The Good Guys and Bing Lee. 
 
According to Simmons it was critical that Acer get the past behind them "as soon as possible".
 
He said "We have openly declared our payments to the ATO and the NSW Government. We are now back winning key contracts and we have some exciting new products in the pipeline. We have won several contracts in competitive pitches recently with both commercial organisations and various Government departments and I am confident that under the guidance of my successor new sales director Rod Bassi  we can continue winning contracts with our new products which include tablets, Ultrabooks and Google Chromebooks". 
 
The Taiwanese Company is also the biggest supplier of Windows tablets to the Queensland Government who recently purchased 14,000 Acer Windows tablets over the Microsoft Surface offering. 
 
Acer have also won a contract to supply 6,100 Android tablets to the Australian Electoral Commission along with 11,000 tablets and 2000 notebooks to the Victorian Police force. 
 
"The past is the past and we now have in place a new management structure for Acer Australia, we are winning business with big retailers, commercial organisations such as Woolworths and various Government departments. We are also set to supply several Private Schools in Australia as well as the Public school sector". 
 
"We believe that when organisations and consumers see our new product offering whether it be our Windows based products or our Android and Chrome offering they will be impressed."
 
"Acer like almost all of the PC Companies have struggled we all had to face up to a 15 to 20% fall in demand for PC products. To overcome the decline, Acer had to fight back by designing a superior product, the new range had to be thinner more functional with better battery life while delivering a lot more power and improved display" Simmons said.
We have done that and what is coming is among the best there is out there.