TAIPEI: Acer, the world's No 2 PC maker, aims to boost its revenue by more than 70 percent over the next three years, while maintaining margins to avoid repeating a similar meteoric rise and fall less than a decade ago.

Much of that growth is set to come from low-cost netbook PCs, sales of which Acer expects to rise over 50 percent in 2010, Chairman J.T. Wang said, citing an improving global economy and a consumer shift to the smaller, more mobile PCs for the explosive growth.

"The idea is to reach $30 billion as soon as possible," Wang told Reuters in an interview, in his first public comments since overtaking Dell as the world's No 2 PC maker.

"When we look at the overall market, if the PC market starts to grow from next year and handhelds have the potential to become a $200 billion market, $30 billion is a modest target."

The market expects revenue at Acer to reach NT$573 billion ($17.6 billion) this year, according to 22 analysts polled by Thomson Reuters I/B/E/S.

The Taiwan-grown PC brand commanded about 14 percent of the global PC market in the third quarter, surpassing former No 2 Dell and coming second only to Hewlett-Packard at over 20 percent, according to research firm IDC.

Acer expects to ship about 12 million low-cost netbook PCs this year, and is currently the biggest player in the field that was pioneered by its crosstown rival Asustek in 2007. About 26 million netbook PCs are expected to be sold this year, IDC said in June.

Next big thing

Wang said Microsoft's launch of its Windows 7 operating system yesterday is also expected to help sales, as consumers look to upgrade their computers running on the much-maligned Vista or the eight-year-old XP system.

"It's positive," Wang said. "Looking at Microsoft the past 10 years, they've made the operating system more complicated all the way. This time, they've made it simpler. It's a totally opposite direction for their design philosophy."

Wang said Acer would be able to maintain its gross profit margin of about 10 percent even as prices of components such as LCD panels and DRAM memory chips climb on improved tech demand.

Such attention to margins would be important to avoid a scenario like Acer's rapid rise in the 1990s, when the company gobbled up market share at any cost and fell into several quarters of operating losses as a result.

"If you look at the past, even when component prices were up or down, we were able to maintain our gross margins at about 10 percent," Wang said. "I expect this to continue."

Spot prices of both LCD panels and DRAM memory chips that are used in every PC have climbed in recent quarters, riding on growing demand for flat-screen TVs and as chipmakers cut production to arrest rapidly falling prices.

Acer shares fell 0.5 percent yesterday, while the TAIEX dropped 1.2 percent.

Reuters

(HK Edition 10/23/2009 page2)