Ouch: Acer Tumbles To $236M Losses As Tab ‘Fever’ Hits

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Notebook maker fumbles its way to major losses as it struggles against the might of the tablet.

201108250233597b9ea 300x300 Ouch: Acer Tumbles To $236M Losses As Tab Fever Hits
Acer Iconia Dual Screen Tab

Acer Q2 financials released today show a company in deep trouble – with an operating loss of US$246m (NT$7.1B local currency) and after tax losses of -$236m.


Consolidated revenue was also down 32% to $3.5 billion, compared to the same period a year ago. 

The Iconia maker blamed sluggish global economy fueling low consumer demand, costs of downsizing channel inventories, and the “slow” PC market, which has gone stale since the dawning of the iPad last year.

The “higher than expected” Q2 loss was result of “considerably” high payments to senior executive for severance pay, Acer said. 

Earlier this year Acer was forced to lay off hundreds of staff as well as departing company with its chief executive Gianfranco Lanci after disagreements over strategy. 

Acer chairman, JT Wang said he expects the tablet  “fever” to decline and notebooks to regain momentum. 

But his company are now No. 4 PC maker globally, pushed out of the top 3 by newcomer Lenovo, according to analysts IDC rankings. 

Although Acer have fought to make a mark on the tablet and indeed smartphone market with Iconia tablets including A500 on Android Honeycomb released to Oz last May, it appears not to have given it the leg up hoped for. 

At least not yet anyway. 

The Taiwanese maker’s first half H1 2011 preliminary results were no better – an operating loss $179m, which it blamed on Q2 events, loss after tax -US$195m and revenue dropping 26% y-o-y to $8bn. Ouch.

 

However, the notebook giant are vowing to make changes: changing its business model from ‘monitoring product sell-in only’ to include the ‘final product sell-through’


This will help “to keep closer watch on the market” for better inventory control and to prevent the catastrophe of Q1/Q2. 

It also maintains a brighter outlook for Q3 and expects revenue growth and improved gross margin, and predicts operating environment will have stabilised by the end of the year. 

But that’s provided consumers can be cured of their tab fever. 
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