Acer Starts Selling Tablet Computer Model as ‘Golden Days’ of Laptops Wane

Acer Inc. (2353) started selling its first tablet computer as Chairman J.T. Wang hunts for new products and a new president to boost profit following three quarters of falling sales and declining market share.

Pre-orders for the Iconia Tab A500, to be sold exclusively through Best Buy stores at $449.99, begin today, with the Google Inc. Android-based device available April 24, Taipei-based Acer, the world’s second-largest laptop maker, said in a statement.

Wang, who took over as chief executive officer after Gianfranco Lanci resigned March 31, plans to restructure the company to focus on developing products beyond laptops, which account for 73 percent of sales. Wang is betting on tablets to regain consumer spending lost to Apple Inc. (AAPL) and help Acer boost earnings amid slowing computer demand.

“We may not be able to get back to the golden days, as notebook plus netbook may be only able to maintain single-digit growth compared to 20 to 30 percent in the past,” Wang said in a conference call with investors last night. Acer has “an aggressive plan” to gain share of the tablet market in the next two years, he said.

The Iconia Tab A500 uses the Android 3.0 system and has 16 gigabytes of storage. It has front and rear cameras and features only Wifi wireless Internet without connection via a phone operator. The tablet has a 10.1-inch screen similar in size to the iPad2 and is $50 cheaper than the similarly equipped device from Cupertino, California-based Apple.

Cut-Price Strategy

Acer’s cut-price strategy, led by low-cost netbooks, helped it overtake Hewlett-Packard Co. (HPQ) as the world’s largest maker of portable computers in the third quarter of last year with an 18.3 percent share, said Bryan Ma, Singapore-based analyst for IDC. Its portion of the market dropped to 14.9 percent in the fourth quarter, falling to second place, as tablets stole sales and slowing consumer demand hurt Acer while helping HP, he said.

“Apple, thanks to its iPad, created so much distraction away from consumer PCs that Acer was harder hit than HP and Dell,” Ma said.

The slowdown caused Acer’s year-over-year sales to decline in the third and fourth quarters, prompting it on March 25 to announce it will miss guidance for the first quarter and post a 10 percent decline in revenue from the previous three months.

“We had too much emphasis on the volume in the past,” Wang said. Any growth in revenue this quarter will come from tablets as computer sales will remain unchanged from the first quarter, he said.

Wang, who will name a president by the end of the month and hold onto the CEO title, said the new tablet device is part of plans to reorganize the business model and product strategy.

“Hopefully in the coming few quarters I can walk the talk,” he said.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net.

To contact the editor responsible for this story: Young-Sam Cho at ycho2@bloomberg.net.

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