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Acer Inc

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Acer Inc

Acer Inc.
Native name 宏碁股份有限公司
Type Public
Traded as
Industry Computer hardware
Electronics
Predecessor(s) Multitech International
Founded 1976 (as Multitech)
Founder(s) Stan Shih et al.
Headquarters Xizhi, New Taipei, Taiwan
Area served Worldwide
Key people Zhentang Wang
(Chairman and CEO)
Products Desktops, laptops, netbooks, servers, smartphones, tablet computers, storage, handhelds, monitors, televisions, video projectors, e-business
Revenue Decrease US$16.18 billion (2011)[1]
Net income Decrease US$-225.3 million (2011)[1]
Employees 7,757 (2011)[1]
Subsidiaries Acer America Corporation
Acer Computer Australia
Acer India
Gateway, Inc.
Packard Bell
eMachines
Escom
Website

Acer Inc. (/ˈsər/; Chinese: 宏碁股份有限公司; pinyin: Hóngqi Gǔfèn Yǒuxiàn Gōngsī, lit. Hongji Corporation) is a Taiwanese multinational hardware and electronics corporation headquartered in Xizhi, New Taipei City, Taiwan. Acer's products include inexpensive desktop and laptop PCs, tablet computers, servers, storage devices, displays, smartphones and peripherals. It also provides e-business services to businesses, governments and consumers. In 2012 Acer was the fourth largest personal computer vendor in the world.[2]

In the early 2000s, Acer implemented a new business model, shifting from a manufacturer to a designer, marketer and distributor of products, while performing production processes via contract manufacturers.[3]

In addition to its core business, Acer also owns the largest franchised computer retail chain in Taipei, Taiwan.[4]

History

Acer was founded by Stan Shih (施振榮), his wife Carolyn Yeh, and a group of five others as Multitech in 1976, headquartered in Hsinchu City, Taiwan.

It began with eleven employees and US$25,000 in capital. Initially, it was primarily a distributor of electronic parts and a consultant in the use of microprocessor technologies. It produced the Micro-Professor MPF-I training kit, then two Apple II clones; the Microprofessor II and III before joining the emerging IBM PC compatible market, and becoming a significant PC manufacturer. The company was renamed Acer in 1989.

In 1989, Shih hired Leonard Liu away from a 20-year career with IBM, making him president of the Acer group and chairman and chief executive officer of Acer America Corp. Liu's managerial style reflected his experience at "Big Blue": in contrast with Shih's traditionally progressive corporate culture, Liu tried to centralize control of Acer. At the same time, the computer industry quickly matured, shifting from a high profit margin business to a low margin commodity practically overnight. Price wars pushed component prices down so rapidly, and a strong New Taiwan dollar made the country's goods so expensive, that it became difficult to make a profit on the finished product.

1990s: creating multinational brand

In the early 1990s Acer experienced a decline in sales and profit. The US operations in particular were at loss due in particular to price war in this market dominated by Compaq, IBM, and HP. The autonomous management of US executives made things worse. Stan Shih undertook a series of immediate restructuring initiatives such as downsizing non-profitable operations, laying-off low performers, and tightening internal cost control. But in addition he redesigned completely the global organizational structure around three major business units and three managerial innovations.

Instead of creating a series of centrally controlled foreign subsidiaries, Acer established a network of virtually autonomous affiliates, much like a fast food franchise system. Each of these affiliates was managed by a group of locals who determined product configurations, pricing strategies, and promotional programs based on national or regional preferences. The affiliate would usually have just one Taiwanese person on staff to facilitate interorganizational communications. Sales & Marketing Management characterized the system as a "revolutionary departure from the traditional hierarchical model of worldwide branches and subsidiaries reporting to a head office". Instead, it was "a commonwealth of independent companies, united only in their commitment to a common brand name and logo".[5]

In 1993, Acer posted record profits of $75 million; 43 percent of that year's net was generated by the DRAM joint venture, considered "the most efficient in the DRAM industry" by some observers. Total sales grew to $3.2 billion in 1994, and net income increased to $205 million, as Acer America turned its first annual profit in the 1990s. From 1994 to 1995, Acer advanced from 14th to ninth among the world's largest computer manufacturers, surpassing Hewlett-Packard, Dell, and Toshiba.

In 1994, Shih unveiled a plan to "deconstruct" Acer into 21 publicly traded business units by the end of the 20th century. Acer Inc. would continue to own anywhere from 19 percent to 40 percent of the firms' stock, but Shih hoped that their independent status would enable the individual units to compete more effectively by facilitating entrepreneurship, inspiring research and development, and allowing for corporate fundraising through stock and bond offerings.

In 1995, the Aspire PC was unveiled. In 1996, Acer expanded into consumer electronics, introducing many new, inexpensive videodisc players, video telephones, and other devices to boost global market share,[3] and in 1997 extended its laptop efforts by buying Texas Instruments' mobile PC division.

Considering two consecutive quarters of net losses in Q2+Q3 2011 and realization they are selling too many products; 101 individual notebook, netbook and chromebook SKUs in the United States alone, Acer will cut product lines by two thirds beginning in 2012.[6]

Spinning-off

Acer Inc. logo history

100px
1987–2000
2000–2011
2011–present

In 1998, Acer reorganized into five groups: Acer International Service Group, Acer Sertek Service Group, Acer Semiconductor Group, Acer Information Products Group, and Acer Peripherals Group. Two years later that corporate restructuring did not appear to have made a significant impact on the company overall, and stock prices were falling. Shih restructured again. To dispel complaints from clients that Acer competed with its own products and to alleviate the competitive nature of the branded sales vs. contract manufacturing businesses, Shih spun off the contract business, renaming it Wistron Corporation. The restructuring resulted in two primary units: brand name sales and contract manufacturing. The restructuring also resulted in Acer breaking off several of its smaller operations, including semiconductor design, consumer electronics, and liquid-crystal displays.[7]

Already starting in 1999 the Company took a series of cost-cutting measures: workforce was reduced, US Operations were downsized. But J.T Wang initiated a profound re-structuring. He introduced a more centrally integrated approach based on 3 global principles: "One Global Company", "One Global Brand" and "One Global Team".

2000s growth

Early signs indicated that the spinoff strategy had worked well, especially in Europe, where Acer became a popular PC brand. The global business model behind this restructuring was to transform Acer from a high technology, hardware-focused company to a customer-centric service-oriented company. On the strategic front, contrary to others PCs vendors who tried to emulate Dell by adopting the direct-sales model, Acer decided to rely on third party channels. By getting rid of all manufacturing functions Acer was free to source all hardware from multiple suppliers. The supply chain model was to direct the flow of goods directly from suppliers to distributors through a headquarters’ centralised enterprise resource planning system (ERP) fed by information coming from local subsidiaries.

In 2003, company sales increased 48 percent to $4.6 billion, and helped Acer surpass Japan's Toshiba and NEC, making it the world's fifth largest maker of PCs.[7] In 2005, Acer has successfully implemented the Channel Business Model across its worldwide operations. In 2004, Gianfranco Lanci, an Italian, was promoted CEO of Acer Inc. while J.T Wang remained President.

Growth and netbook raise

Acer increased worldwide sales while simultaneously reducing its labor force by identifying and using marketing strategies that best utilized their existing distribution channels. By 2005, Acer employed a scant 7,800 people worldwide. Revenues rose from US$4.9 billion in 2003[8] to US$11.31 billion in 2006.

Acer's North American market share has slipped over the past few years, while in contrast, the company's European market share has risen.[9]

In the mid-2000s 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 had made it one of the main beneficiaries of this trend.[10] Acer grew quickly in Europe in part by embracing the use of more traditional distribution channels targeting retail consumers when some rivals were pursuing online sales and business customers. In 2007 Acer bought Gateway in the USA and Packard Bell in Europe and became the Number 3 world provider of computers and number 2 for notebooks, and achieved significant improvement in profitability. Acer has been striving to become the world`s largest PC vendor, in the belief that the goal can help it achieve economy of scale and garner higher margin.[11] But such a reliance on the high-volume, low-value PC market made Acer exposed when buying habits changed.

2010's sales falling and restructuring

Following the decline in sales, especially of notebooks, the company's president Gianfranco Lanci, the man who was largely responsible for the super-efficient, high-volume channel business model that made Acer the second biggest PC OEM by sales volume was departed due to disagreements with the shareholders. Lanci said that the interests that control Acer were worried that his plan would lead to a de-Taiwanization of the company while he was just trying to make it more global.[12]

On June 2011, Acer re-evaluated its inventory-management strategy in light of worsening economic conditions in Europe, clarifying a large write-down. Acer said the main reason for the disputes was "high inventory" carried by distributors of its products, reflecting an "inappropriate strategy" in its European operations under the current market situation. According to Acer, "Southern Europe's economic situation has been worsening since last year" and the stagnant technology market, particularly in Spain, "influenced Acer's PC sales". Acer discovered the problems through a routine audit, it added.[13]

In efforts to stimulate growth, the company began in strategic restructuring aimed at strengthening Acer as a marketing-oriented company. To energize and strengthen Acer’s global marketing organization, Acer began engaging with Red Peak Group, a global marketing services firm, and appointed Red Peak Chairman Michael Birkin as Acer Chief Marketing Officer. In addition to the marketing organization and personnel changes, Birkin has been assigned to lead a newly established marketing committee as Chairman, responsible for integrating Acer’s global branding and marketing strategy.[14]

In September 2012, chairman Wang declared Acer's top priority as to boost its operating margin. The company plans to sell more ultrabook laptops and touch-enabled Windows 8 devices, and invest more in product research, development and marketing. He said the global economic slowdown and product transition to the new Windows operating system have made business more challenging.[15]

Acquisitions

In 1990, Acer acquired Altos Computer Corporation

On 27 August 2007, Acer announced plans to acquire its US-based rival Gateway, Inc. for US$710 million. Acer's chairman, Jen-tang Wang, stated that the acquisition "completes Acer's global footprint, by strengthening our United States presence".[16] Included in this acquisition was the eMachines brand.

In January 2008, Acer announced that it had acquired a controlling interest of 75% of Packard Bell.[17]

In March 2008, Acer acquired: E-TEN. In 2009, Acer acquired 29.9% of Olidata.

In August 2010, Acer and Founder Technology signed a memorandum of mutual understanding to strengthen their long term PC business cooperation.

In July 2011, Acer Inc. bought iGware Inc. for $320 million to try possible potentially lucrative cloud market.[18] iGware creates cloud software and infrastructure tools for devices.[19]

Figures

29 April 2010[20]

  • Acer announced revenue in Q1 rose 36 percent year-on-year to NT$162.1 billion (US$5.2 billion) and its net profit increased 63 percent to 3.29 billion New Taiwan dollars (US$104.7 million); 27 percent of revenue comes from the U.S.
  • Gianfranco Lanci announced that Acer will launch 4 new smartphones by Q3 2010, and a series of "Internet Devices" by the end of May which will run version 4.0 of its Shell user interface.
  • According to Gartner and IDC, Acer now ranks No. 1 worldwide in notebook shipments.[21]

Operations

North America


Acer America Corporation, headquartered in San Jose, California, is a member of the Acer Group. Acer's R&D, engineering, manufacturing and marketing operations in the United States and Canada are handled by Acer America. In September 1990, Acer acquired Altos Computer Systems, one of the top manufacturers of multi-user and networked Unix computer systems for commercial markets. In February 1997, Acer acquired Texas Instruments Mobile Computing business, including the award-winning TravelMate and Extensa notebook lines, making Acer the fourth-leading notebook manufacturer in the United States. In 2007 Acer acquired PC maker Gateway. The acquisitions marked Acer’s return to the US consumer market that it abandoned in 1999 after losing $45m struggling to build brand awareness. Acer America's Canadian office, in Mississauga, Ontario, handles repair of Acer, Gateway, and E-Machine Notebooks and Desktop PCs for Eastern Canada. Acer has several facilities in Temple, Texas including a repair facility, a parts warehouse, and a call center. In the words of its Chief Executive, J.T. Wang, “Building a brand is very different in the US. The investment at the initial stage has to be very big—otherwise there is almost no impact”.[22]

Australia

The Australian subsidiary of Acer is Acer Computer Australia (ACA). The subsidiary was established in 1990, and is currently Australia's third largest personal computer vendor, behind Hewlett-Packard Australia and Dell Australia and New Zealand. Acer Computer Australia has Australia's highest overall market share in notebook PC and tablet PC sales. The company is also Australia's leading PC vendor in government and education markets. Acer Computer Australia has 480 employees as of 2006.

India

Acer's subsidiary in India is Acer India (Pvt) Limited, and was incorporated as a wholly owned subsidiary of Acer Computer International, Ltd. in 1999. It is a notable vendor in key segments such as education, desktop computers and low profile notebooks for education. The headquarters are in Bangalore, India.

Russia

By the early 1990s Acer has gained some valuable experience in emerging markets with operations in Latin America and Asia. President William Lu asked Steve Kuzara if he wanted to give Russia a try and open an Acer representative office in Moscow. Kuzara had expressed an interest in Russia with he first began working in Acer in 1990. Acer set up its office the highly-competitive Russian PC market in 1993. Acer competitors such as Hewlett-Packard, Dell Computers, Digital Equipment Corporation, Apple, and Compaq were already there.

Linux

Acer has shipped some of their notebooks and more recently netbooks, with various Linux operating system distributions including Ubuntu, Linpus, Android (in a dual boot environment with Windows XP), and Google Chrome OS. They have also launched a line of smartphones and tablets with Android.

Products

Business desktops

  • Acer Veriton series

Business notebooks

Chromebooks

  • Acer AC700
  • Acer C710

Computer displays

  • G Series
  • P Series
  • H Series
  • X Series
  • B Series
  • V Series
  • S Series
  • T Series
  • D Series
  • MO Monitor TV series

Consumer desktops

Consumer notebooks

Home network solutions

Mobile phones

Netbooks

Nettops

  • Acer Aspire Revo

Projectors

  • Professional series
  • Home series
  • Travel series
  • Value series

Servers and storage

  • Acer server F1 series
  • Tower series: T110 F1, T115 F1, T150 F1, T310 F1, T350 F1;
  • Rack series: R160 F1, R180 F1, R320 F1, R360 F1, R380 F1, R385 F1, R585 F1;
  • Blade series: B2x285 F1, B2x280 F1, B460 F1;
  • Gemini series: B1170 F1, B2170 F1, B2170t, B2175 F1
  • Home Server Series: H340, H341, H342, Altos Easystore M2
  • Acer storage series
  • N500 F1, N1600 F1, HNAS3080, GS2040, AMS2100, AMS2300

Tablets

  • Acer Iconia Tab series

Television

  • AT Series

Other (discontinued devices)

Brands

Environmental record

In 2005, Acer published its first environmental report, for which the company used the GRI guidelines.[23] All of Acer’s tier-one suppliers have acquired ISO 14001 certification.[24]

In November 2011, Acer was ranked 12th place out of 15 in Greenpeace’s re-launched Guide to Greener Electronics, with the a score of 2.9 points out of 10. The Guide ranks electronics makers according to their policies and practices to reduce their impact on the climate, produce greener products, and make their operations more sustainable.[25]

Greenpeace criticized the company for not setting out targets to reduce greenhouse gas (GHG) emissions as intended in 2010 and for not providing external verification for the GHG emissions it reports for its operations and business travel. It also scored badly on the Products criteria receiving no points on product life cycle while Greenpeace noted that a higher percentage of its products need to meet or exceed Energy Star standards in order for it to score more points.[25]

It received some praise for launching new products which are free from polyvinyl chloride plastic (PVC) and brominated flame retardants (BFRs) and the company informed Greenpeace that the majority of its products will be PVC/BFR free in the near future. Acer also scored well on chemical management for lobbying for restrictions on organo-halogens and was commended for reporting on GHG emissions from its first tier suppliers and investigating its second tier.[25]

In its 2012 report on progress relating to conflict minerals, the Enough Project rated Acer the seventh highest of 24 consumer electronics companies.[26]

Sponsorships

Acer sponsored the BAR-Honda Formula One racing team in the year 2000.[27] In 2001, Acer provided sponsorship to the Prost Grand Prix Formula One team, and the team's Ferrari engines were badged as Acers.

Acer sponsored the Ferrari Formula 1 team from 2003 up to 2012 (Official Supplier since 2006) and its Top Sponsor of FC Internazionale – Milano (Inter Milan) Football Club. From 2007 to 2009 Acer has been Official Supplier of FC Barcelona.[28] On 19 March 2007, Acer announced it will sponsor the Factory Fiat Yamaha Team for the 2007 MotoGP World Championship season. From 2009, Packard Bell (that it is part of Acer Group) is the sponsor of Yamaha Factory Racing Team.[29] since 2010 Acer support Army United F.C. the Thai football team of the Thai Premier League.

Acer has been Worldwide TOP Partners for both the Vancouver 2010 Olympic Winter Games and Singapore Youth Olympic Games. Acer was TOP Partner of the London 2012 Summer Olympics.

On July 19, 2011, Acer formed a professional gaming team. The company currently supports from around the world who represent Acer in games such as StarCraft 2, TrackMania, and FIFA Soccer.[30]

See also

Taiwan portal
Companies portal
Information technology portal

References

External links

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