Reuters Summit - Acer upbeat on PC sales

HONG KONG (Reuters) - Acer, the world's fourth-largest PC vendor, aims to sell 56 percent more branded PCs next year after expanding its global distribution network, the comapny's chairman has said.

In contrast to sector leader Dell's direct sales model, Acer relies on distributors -- the key to its success in Europe, the company's largest market now. It's gains in Europe are now fuelling its ambitions in the US and Chinese markets.

Acer, one of the few internationally recognisable Taiwan computer brands, expects to sell 10 million desktop computers in 2007, doubling from 4-5 million projected for this year. Its laptop sales will grow to 15 million next year, compared with this year's 10-11 million.

"We feel that there is great opportunity that we can leverage all existing supply chain operations that focus on notebooks to come back to the desktop sector," Acer's J.T. Wang said at the Reuters Global Technology, Media and Telecoms Summit in Hong Kong.

"If we want to be number three, we have to grow both because desktops still represent more than 60 percent of the market in units," said Wang, who succeeded Acer founder, Stan Shih, in January last year.

Acer ranked fourth in the world in the fourth quarter, with a 5.4 percent market share, according to preliminary data from research company International Data. Dell was first with 17.2 percent, Hewlett-Packard second with 15.7 percent and Lenovo/IBM third with 7.2 percent.

Acer is on track to be the world's number three next year, with Europe accounting for 60 percent of Acer's revenue. China contributed 11 percent, the United States eight percent, and the rest of the Asia-Pacific region 13 percent.

HP'S RADAR SCREEN

Hewlett-Packard has apparently expressed its concern over Acer, which is the third-largest seller of notebook computers in Europe.

"We respect the new HP and it will become more efficient and quicker... but HP has to decide which way it wants to go," Wang said.

"If they want to go direct that's fine, focus on direct but if you want to keep direct and channel, that gives Acer better opportunity to grow."

Globally, Wang said he expected PC sales to grow around 10 percent this year over last year. Laptop growth is seen at 30 percent, faster than a slim 2-3 percent for desktops.

While the average selling price of computers keeps falling, Acer still wants a stable 2.5 percent operating margin in the near future, the company veteran said.

Acer has said consolidated revenue last year was $US9.65 billion, up 38 percent, and in line with analyst estimates. Acer has forecast sales to grow 40-50 percent annually in the next three years.

The firm also makes personal digital assistants, and flat-screen monitors and televisions.

Acer dropped out of contract manufacturing to further develop its own brand in late 2000, when Wang was named president.

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