Acer targets US, China in big global push

SHANGHAI - Taiwan's Acer Inc, the world's fourth-largest PC maker, wants to challenge Dell Inc and Lenovo Group Ltd in their home markets, as it aims to boost sales of its own brand by up to two-fifths in 2006.

Acer, which ranks below Dell, Hewlett Packard Co and Lenovo in the global market, aims sales of Acer-branded laptops and desktops to reach $US10 billion ($NZ14.5 billion) to $US11 billion next year versus $8 billion in 2005, President Gianfranco Lanci said.

The Taiwanese firm's growth plan hinges on recently secured deals with retailers and distributors such as Circuit City Stores Inc in the United States and Digital China Holdings Ltd in China, Lanci said in a Tuesday interview.

Self-branded computers now account for 80 to 85 percent of the firm's overall revenue, he added.

"We want to be number three (globally) by 2007," he said ahead of a briefing to outline Acer's new strategy for China, where homegrown Lenovo controls about a third of the market.

"We think we can pass Lenovo" in global market share, the tall, animated Italian executive told Reuters.

In the second quarter, Dell was the world's top PC seller with 19 percent of the market, followed by Hewlett-Packard at 15.4 percent, Lenovo at 7.5 percent and Acer at 4.4 percent, according to International Data Corp.

North America and China are the two biggest growth areas for Acer, with the firm aiming to double sales in both markets in 2006, said Lanci, who assumed his post in January.

Desite Dell's dominance of its home market, Acer intends to ramp up North American sales of PCs bearing its label to $2 billion in 2006 -- or about a fifth of global Acer-brand sales, versus 11 to 12 percent this year.

In China, Lanci hopes Acer-branded PC sales would account for 4 to 5 percent of global sales this year, or about $US320 million.

Acer is arguably Taiwan's best-known tech brand, in a sector where large but little-known companies from Hon Hai Precision Industries to Compal Electronics make products under contract for the likes of Hewlett-Packard.

Over the next few years, Acer would like to boost its North American business to about 30 percent of global revenue from sales of its own brand. Europe -- its largest market by far -- would fall to about 45 to 50 percent.

It would like Asia to account for 20 to 25 percent of Acer-brand sales, from less than 20 percent now, Lanci said.

In North America, it recently secured deals with retailers such as Circuit City and Staples Inc, Lanci said.

In China, the firm had sealed similar agreements in the past month with two of the markets' biggest distributors, Digital China and Ingram Micro Inc, Lanci said.

Acer also re-located its operational headquarters to Shanghai from Beijing, and consolidated warehouse facilities.

"We took a lot of action in the last two quarters," the executive said. "We did a lot of consolidation."

Analysts fear Acer's growth ambitions would trim profitability. But Lanci expects growth in operating income to outpace revenue expansion as the company keeps a lid on costs.

Lanci argued that Acer would meet its ambitious goals in China with just a 60-percent jump in staff in coming years, to about 400 people. It would need only to add 50 people in North America to hit its aggressive growth target, he said.

- REUTERS