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Acer stock plummets in midst of identity crisis

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Taiwanese computer giant Acer wants to be like Apple with premium products and high margins. Now it thinks it has a more promising future in tablets, Bloomberg reports.

This is a big change in Acer’s strategy. The company has previously focused on the high-volume consumer PC business, trying and failing for a long time to overtake Hewlett-Packard as the number one PC manufacturer.

The CEO responsible for the previous strategy, Gianfranco Lanci, resigned yesterday after many disappointing months. During the fourth quarter of last year Dell overtook Acer as the number 2 PC maker in the world. This year did not start well either: Acer’s stock price has plummeted 22 percent since March 25 when the company slashed its first-quarter sales forecast.

Now the company is leaving cheap consumer notebooks and the quest for market share behind. It is focusing on profitability.

“There is good consensus among the board members that the tablet is the way to go,” Chief Financial Officer Tu Che-min told Bloomberg.

It’s no wonder tech companies would like to be like Apple with high margins and desirable products. According to Bloomberg, Apple had 21.5 percent profit margin last year. Acer had 2.3 percent. But it’s not easy to transform a company from a mass producer of netbooks to a high-margin brand. Acer knows that, and that’s why it is searching for a new CEO who is a leading player in smartphones and tablets.

Moving to tablets won’t be an easy task. Apple dominates the market with the iPad, and the competition is fierce. Motorola’s Xoom, BlackBerry’s Playbook, the new Samsung Galaxy Tab and HP TouchPad are just some of the devices trying to find their place in the market. Acer has its own Picasso tablet that uses the Android operating system, but there in no information available on the release date or pricing.