Acer Steps up Cooperation With Hon Hai

Taipei, Nov. 4, 2005 (CENS)--To achieve its goal of becoming the world's third-largest personal-computer brand by 2007, Acer Inc. will enhance its cooperation with contract manufacturer Hon Hai Precision Industry Co. and expand its desktop PC work team.

To achieve its sales goal, Acer plans to sell between seven million and eight million notebook PCs this year, with the volume increasing to 10 million next year and 15 million in 2007.

The company also set a goal of selling 10 million desktop PCs in 2007. To this end, the company will set up a special team charged with boosting Acer's world market share in the desktop PC arena. The company will also enhance its cooperation with Hon Hai in the fields of product design, research and development, and marketing.

Acer chairman and CEO J.T. Wang estimated that the notebook PC would soon become one of the mainstays of the PC world with a 50% market share. Wang predicts that if the price for notebook PCs is set at between US$500 and US$600, sales will grow 30% to 35% annually, faster than the pace of 10% to 15% for desktop PCs.

Wang noted that Acer's core competence rests in building the notebook PC, and he is confident that his company's sales numbers for the products will top those of competitors this year.

At present the world's top-five PC brands are Lenovo, Dell, Hewlett Packard, Acer, and Fujitsu-Siemens. All of these brands except Lenovo rely heavily on notebook PCs to boost overall sales.

As for marketing strategy, Acer president Gianfranco Lanci said that his company has targeted the U.S. and the mainland Chinese markets to boosts sales in the years to come. Acer estimated it would see sales exceed US$1 billion in the U.S. marketplace, and that the amount is expected to reach US$2 billion in 2006 and US$3 billion in 2007.

At an institutional investor presentation recently held in Taipei, Acer said it would see its gross operating margin rebound to 10.5% in the fourth quarter of this year. The company saw the margin slide to 9.9% in the third quarter from the preceding quarter's 11.1%.

The company registered NT$6.375 billion (US$189.73 million) in consolidated after-tax earnings, or NT$2.88 (US$0.085) in earnings per share, in the first three quarters of this year. Of this amount, NT$5.38 billion (US$160.11 million) came from core business operations, up 135% year-on-year and reaching 90% of this year's earnings goal.