How Once-Ailing PC Maker Acer Turned Itself Around And The Man Who Did It

Adi Arriansyah . July 20, 2018

Acer's revenue is back on the upswing. The world’s sixth-largest PC maker said last week that its second-quarter revenue rose to $1.9 billion, a jump of 9.1% from the same period last year. A much-needed boost for a company that has been floundering since 2011 as global PC sales slowed and the company grappled with management issues after its Italian-born CEO suddenly quit.

This year’s surge follows brisk sales of Acer-made Chromebook PCs with the Google operating system, usually for use in schools, the company says in a statement July 9. But PCs for gamers were "a key contributor to the growth,” Acer said. Revenue from that line of business expanded 107% in the first half of the year. And another key contributor: Acer CEO Jason Chen “Jason has set clear directions that are aligned and followed through across business functions, allowing the company to operate efficiently and react quickly in the ever-changing tech industry landscape,” a spokesman for Acer said in an email.
When the company decided in 2016 to focus more on gaming, "Jason fostered internal alignment, making sure that all of the team leaders in more than 70 countries that Acer operates in clearly understand the strategy and direction the company is headed towards,” the spokesman added. Coming from behind The developer began making its Predator brand of gaming PCs in 2008, starting with desktops. Then Acer’s rivals Asustek, Dell and MSI surpassed it, says Tracy Tsai, research VP with the tech market analysis firm Gartner in Taipei.
“I can be sure that all the developers are investing in this,” Tsai says. “It’s very obvious that users are buying and gaming is quite a stable market.” More on Forbes: Asus Will Take The Fight To Apple And Levovo With Its New Two-Screen Laptop Acer's Nitro line for casual gamers now sells alongside Predators for the more hard-boiled. Acer distinguishes itself on “advanced thermal technologies,” the company says. It has received hundreds of patents in this space, allowing it to develop 3D metal fan technology that increases a PC’s airflow by up to 35% compared to plastic fan technology. The company also came out with shielding technology to protect users from hazardous emissions if they use a PC with a see-through chassis. “The cards were stacked against [Acer], especially compared to cross-town rival Asus, whose long-standing component business had already secured them plenty of street cred with gamers,” says Bryan Ma, VP of client devices with market research firm IDC. “But to Acer’s credit, they’ve been able to build that Predator brand over the years and may have more opportunity ahead as interest in gaming spreads beyond hardcore gamers to more mainstream users," he says. Chen and Acer’s revival Taiwan’s Chinese-language United Daily News website credits him with turning Acer’s financial losses into gains. The 56-year-old CEO once in the leadership of IBM and Taiwan Semiconductor Manufacturing Co. (TSMC) took the helm at Acer in 2014. He hails from a marketing background and gets attention for his “straightforward” personality, the news website says. He came on board to help oversee Acer's “turn around,” it adds. Unlike the head of other flagship Taiwan tech firms, Chen has shown up at some events in a T-shirt, usually a hallmark of activities for tech startups. Chromebooks and cyclical PC growth Augmenting figures for the past quarter, Chromebook revenue expanded by “double digits,” Acer's statement says. That may explain an outsized 20% revenue growth from the U.S., which takes most of the world's Chromebooks. Acer has not yet announced earnings for April through June, but a net profit of NT$1.45 billion in the third quarter last year was its highest 27 quarters, per this news report. In 2013, as Acer hit an income low point, revenues came to NT$360 billion ($11.75 billion), down 16% over the previous year, and net losses totaled NT$11.4 billion. Company founder Stan Shihcalled 2013 a year of “business underperformance.” Shih established Acer in 1976 and built it into a major player and a breeding ground for executives who went on to set up their own companies. His achievements came to embody Taiwan's success in PCs in the 1980s and 1990s. Although hailing from an island known for its copycat image, Shih put Acer on the global map of companies with their own brands. But it came at a cost: Acer for years had trouble making money from its core PC business. Worldwide demand for notebook PCs, including gaming devices, further helped Acer’s second quarter this year, the Taipei consulting institute’s senior industry analyst Sagitta Pan says. Some consumers are buying for school semesters that start in September. Others are gamers who want the latest machines. The second quarter is "traditionally the peak season for notebook PCs," Pan says.
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