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Acer boss throws in the towel

by Scott Bicheno on 31 March 2011, 10:04

Tags: Acer (TPE:2353)

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Feeling the pressure

The revolution being experienced by the tech industry cost another senior exec his job today, as the Acer CEO and president - Gianfranco Lanci - resigned with immediate effect. There's no replacement lined up and Acer Chairman - J.T. Wang - will take over Lanci's responsibilities until they find a new one.

"The personal computer remains the core of our business," said Wang. "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."

Lanci had been with Acer for 14 years, and was rewarded for the strong performance of Acer in EMEA with the promotion to president in 2005. The CEO role was added three years later. Lanci is largely responsible for the super-efficient, high-volume channel business model that made Acer the second biggest PC OEM by sales volume.

But that model looks to be faltering in the face of the seismic shift currently happening in the tech industry. Mobile devices such as smartphones and tablets offer an increasingly viable alternative computing experience to the PC, leading many consumers and businesses to think twice before buying their next notebook.

In the past few years consumer notebooks have been almost the sole growth drivers for the PC industry, and Acer's exceptionally low overheads and dedication to the channel have made it one of the main beneficiaries of this trend. But such a reliance on the high-volume, low-value PC market was always going to leave Acer exposed when buying habits changed.

And that's exactly what has happened, thanks mainly to the mobile device revolution. People can now perform many of the computing tasks they would previously have relied on their PCs for, on their mobile phones. Meanwhile the emergence of the tablet category has led many would-be notebook purchasers to reconsider.

A few days ago Acer announced its revenues would fall short of expectations for the current quarter, and that was after a disappointing end to last year. This was followed by a comment from Acer founder - Stan Shih - that Acer needed to rethink its strategy to adjust for the impact of the mobile device revolution.

In the press release announcing Lanci's resignation, the reason for his departure was explained: "On the company's future development, Lanci held different views from a majority of the board members, 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."

If we assume that Shih's views coincide with those of the board, it looks like Lanci was shown the door for showing insufficient commitment to mobile devices and an over-reliance on the volume notebook business. That would give Lanci something in common with former AMD CEO Dirk Meyer, who was relieved of his duties for similar reasons. He might also like to compare notes with Olli-Pekka Kallasvuo and Anand Chandrasekher.

Acer has launched a range of tablets, but has not received the publicity of other Android tablet-makers such as Samsung and Motorola. It has been in the Android smartphone market for a while now, but again has kept a pretty low profile.


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