Acer Inc. used to market itself as one of the world's leading desktop PC and notebook manufacturers. Even now, promotional materials on the company's website proudly proclaim its position as the "No. 2 for total PCs and notebooks." I fully expect Acer to drop that tagline within months. Why? It's no longer fashionable, profitable, or investor-friendly for OEMs to market themselves as a PC market leader without any mention of leadership in smartphones and tablets, too.
Just ask Gianfraco Lanci. A veteran of the electronics industry, Lanci had helped build Acer's brands, including Gateway, Packard Bell, and eMachines. After pushing Acer into a strong position in Europe, he became CEO of the parent company in 2008. Yesterday, Lanci resigned from Acer "with immediate effect," according to a press release issued by the Taipei-based OEM. Chairman JT Wang has taken over as interim CEO and immediately began a strategic review of the company's future.
Why did Lanci leave so abruptly? With a little hyperbole on my part, I would describe it as the Apple-iPad effect. The runaway success of Apple Inc. (Nasdaq: AAPL) in the tablet space can hurt manufacturers focused on PCs and notebooks, especially those perceived as not having a strong tablet offering. Acer was one of those manufacturers. The company has limited options for tablet consumers, and the three tablet products it introduced in November are not showing up on anyone's radar.
Acer's tablets certainly aren't being pitched as contenders for Apple's throne as the world's leading vendor of tablet computers. In a review of Acer's tablets rolled out in November, PCMag.com's Lance Ulanoff was less than enthusiastic, noting that the company left out too many details about the products. Furthermore, the Acer tablet products were unnamed and were not expected to hit the market soon. The situation hasn't changed. I combed through Acer's website following Lanci's resignation and couldn't find a single tablet computer to review. If you've seen, bought, or used a tablet PC from Acer, please post a comment below and let me know what you think of it.
Acer obviously wants to play in the tablet market, but where are its first tablet products, when will they hit the market, and how competitive will they be against products from Apple, Motorola Mobility Inc. (NYSE: MMI), and BlackBerry (Nasdaq: RIMM; Toronto: RIM)? Acer has said that it has always striven to be a "mobility" company. In February, during the World Mobile Congress, Acer issued a press release stating that, long ago, it "decided to stake everything on mobility." It recognized that "being able to offer the market a continuity of experience involving netbooks/notebooks, smartphones and tablets is of critical importance."
One would have assumed Lanci agreed with that position, but apparently discussions had been going on behind the scene with the board of directors about Acer's corporate direction. "Lanci held different views from a majority of the board members, and could not reach a consensus following several months of dialog," Acer said in the press release. The board and Lanci "placed different levels of importance on scale, growth, customer value creation, brand position enhancement and on resource allocation and methods of implementation."
To translate that oblique statement into layman's language, Lanci was headed in a direction Acer didn't want to go. However, I'm not exactly clear on the company's plans for the future, even after reading chairman Wang's parting words on Lanci's resignation:
The personal computer remains the core of our business. We have built up a strong foundation and will continue to expand within, especially in the commercial PC segment. In addition, we are stepping into the new mobile device market, where we will invest cautiously and aim to become one of the leading players.
In this new ICT industry, Acer needs a period of time for adjustment. With the spirit of entrepreneurship, we will face new challenges and look to the future with confidence.
I still don't get it. Did Acer think Lanci was being too cautious and behind the times, or was he moving too fast for the board? I am sure of this, though: Acer needs a new CEO and a new catch phrase that's not just about desktop PCs, notebooks, and netbooks. But first, it must show us a set of strong tablet products.
You can kinda get an idea of the Direction in which Acer wants to take itself from the way they are approaching Smartphones...
Senior Execs are still not convinced about the speed with which they need to execute and bring products to market(and even if they should be in that market).
The begining of failure is when you loss self-confidence in what you believe in. Acer wants to step gradually and carefully into the new mobile device market forgetting that technology is not static. What is worth doing at all is what is needed to be done well. If ACER wants to do it, now is the time to strike not in the next century.
If you read ACER's Press release clearly.Its most unlikely you will get something exciting coming out of Acer's stable in the near future.
I was recently in the market for a Windows Mobile smartphone(for company usage).
I had some specific other requirements also
Wifi,3G,fully functional Keypad and some other features.
That was the first time I knew that Acer manufactured smartphones!!!
They don't do any advertising about those phones and they are'nt featured highly anywhere.Its like they have already ceded the market to the likes of Apple and RIM(before the fight even started...)
That is why I doubt if Acer even has a proper Mobile strategy in place.
Its a well known fact when a company becomes Big& successful pursuing one strategy they are loath to change that strategy until its too late...[I learnt in Strategy class as well in that Great book-Innovators Dilemma].
So its no surprise that a company as wildly successful as Acer[Yes it is ,among the dozens of OEM manufacturers in Taiwan/China,how many have been able to carve a successful Brandname for themselves in the World Market??];will do whatever they can to HOLD ONTO and preserve their Gains[Note the operative word here].
This is exactly what that statement released by the Company below means-
"The personal computer remains the core of our business. We have built up a strong foundation and will continue to expand within, especially in the commercial PC segment. In addition, we are stepping into the new mobile device market, where we will invest cautiously and aim to become one of the leading players."
They are unsure if Tablets are just a fad which will go away in a couple of years or be the next big thing.Why pour our Valuable Capital and Resources in ,if this is just a fad that is going to die away soon???
I am not saying this is the right strategy,just the way they are thinking right now.
It is clear that Acer is late to the Tablet party and the chairman is still not able to accept it. If they have money they should make aggressive investments or a better idea is may be to acquire a start up tablet company and they can turn it around. Don't you all feel the same!!!!!
"In addition, we are stepping into the new mobile device market, where we will invest cautiously and aim to become one of the leading players."
What does "invest cautiously" mean? To me, they know that they are so far behind that they are not sure that they can gain ground and be an effective player. Also, "aim to be a leading player" does not inspire confidence and drive. Maybe Acer is saying what they think investors want to hear right now but are not sure of where they are heading and/or how they can regain market leadership.
I agree with you. There is no clarity on whether Lancy was being too cautious and behind the times, or was he moving too fast for the board ? Any idea who is in the race to become new CEO ?
By moving to the core of the industry and offerings services that keep the system humming, a group within the electronics market has rendered irrelevant the question of ownership and control of the supply chain.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
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Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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