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Article

Acer CEO Falls to the iPad

Citigroup said Acer is the “biggest victim of tablet PC cannibalization of consumer notebooks in developed markets”

Acer CEO and president Gianfranco Lanci has quit after an apparently profound disagreement with his board.

The world's sometimes number two PC merchant warned Friday that its PC sales in Europe and the US were down 10% sequentially in the unfinished first quarter and that Q2 was likely to be flat compared to Q1. Its fourth quarter wasn't that great either. As a result, its shares dropped 18%, losing over $1 billion in market cap. There's now talk of further adjustments.

Citigroup said Acer is the "biggest victim of tablet PC cannibalization of consumer notebooks in developed markets" and would likely be a smaller company if tablet sales pass notebooks.

That makes Lanci the first CEO sacrificed to the iPad.

The company released a statement Thursday saying that he held different views on the company's future development from a majority of the board and "could not reach a consensus following several months of dialog."

"They placed different levels of importance on scale, growth, customer value creation, brand position enhancement and on resource allocation and methods of implementation," it said.

Acer chairman J.T. Wang will replace Lanci for the time being.

Wang said that "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."

Acer is planning to ship five million-seven million tablets this year. It delivered an Iconia Tab in February and expects to follow with other models in Q2. Somebody told Reuters that Lanci and Wang were at odds over how much to invest in tablets. Acer also lost NEC's PC business to Lenovo.

Thursday's statement said "The company has commenced with the planning of organizational and operational adjustments for the sustainable future of Acer."

"Acer will continue to push for globalization, follow its multi-brand and channel business model, develop competitive products and services, and foster closer relations with key vendors and channel partners."

Lanci has been with Acer since 1997 and became the rare foreign head of a Taiwan company in 2004.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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