Acer's ascent in the global PC and display market continued--along with its profits--a trend the company says will continue this year, though not without challenges.
The Taiwan vendor, which is taking on the likes of Dell, Hewlett-Packard, Lenovo and Toshiba in the PC market, and Samsung, HP and Dell for displays, last week posted 41 percent revenue growth for 2005 on $9.6 billion in sales. Operating income of $258 million for the year was up 21 percent over 2004.
Acer's worldwide PC market share for the year climbed steadily, according to Gartner. The No. 4 supplier of PCs shipped 10.1 million units in 2005, compared with 6.4 million units in 2004, giving it a full 1.2 point of market share.
According to Gartner, Acer's global PC unit growth jumped 58 percent, compared with rival Lenovo, which shipped 15 million units, up 16.4 percent. HP and Dell both remain dominant by a factor of at least three, though their growth was 15.1 percent and 18.6 percent, respectively.
Acer has had a more difficult time cracking the North American market, according to analysts. In notebooks alone, it shipped just less than 6 million units, of which only 790,000 units were in North America, according to market researcher DisplaySearch. In comparison, Toshiba shipped 2.6 million notebooks in North America, while HP sold 4.4 million units and Dell 7.4 million.
At last month's Flat Panel Display conference in San Diego, Acer executives acknowledged the challenge in North America and said they intend to be more aggressive in the channel, says DisplaySearch notebook PC analyst John Jacobs.
"Acer doesn't do anything direct--you can't go to Acer's Web site direct and buy a notebook. It will refer you to a third party, unlike everyone else," Jacobs says. The problem, adds Gartner analyst Leslie Fiering, is that Acer lacks brand awareness and the company is not addressing that.
"The company has good products, but in terms of being an IT player, Acer is not investing in what's required to be a relationship player," Fiering says. "They don't have the brand recognition, and they don't have the direct sales force to create the brand."
An Acer says said the company fulfilled orders through 9,000 different channel partners in March, adding that no forthcoming changes to its channel strategy are in the works. "We do not have any external sales force globally, and this will not change for the foreseeable future," the spokesman said in an e-mail.
Meanwhile, Acer's display business is having more success in North America, where the company catapulted from the No. 10 supplier in 2004 to No. 4 last year, behind Dell, HP and Samsung, according to DisplaySearch. "Everyone is scared to death of them," says Chris Connery, a DisplaySearch analyst.
For 2006, Acer is forecasting more moderate growth; the company is predicting revenue of $12.4 billion and profits of $335 million.