Acer Could Replace Dell As World's No. 2 PC Maker - InformationWeek

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Infrastructure // PC & Servers

Acer Could Replace Dell As World's No. 2 PC Maker

Despite reporting disappointing first-quarter financial results and lowering its netbook shipment forecast, Acer is still growing while Dell's performance is suffering.

Acer could surpass Dell this year as the world's second-largest PC maker in terms of shipments, if current sales trends continue.

Despite the economic downturn, Acer on Wednesday projected that mobile PC shipments would climb 30% to 40% in the second half of the year. At the same time, the world's third-largest PC maker lowered its 2009 forecast for low-cost netbook shipments to between 10 million and 12 million from its previous expectation of 12 million to 15 million.

Acer tossed out the latest numbers in releasing disappointing financial results for the first quarter. Profits fell 31% to $60 million as revenue dropped 6.5% to $3.5 billion from $3.8 billion. Analysts had expected profits of $64 million.

Nevertheless, Acer's projected growth could result in the Taiwanese company surpassing Dell in overall PC shipments, excluding computer servers, if the latter company continues to see negative growth. In the first quarter, Dell saw PC shipments fall for the second consecutive quarter, dropping 16.7% worldwide, according to IDC. On the other hand, Acer's shipments increased 6.8%.

Dell's poor performance in the quarter led to the company dropping to No. 2 in the United States behind rival Hewlett-Packard, which is the world's largest PC maker in terms of shipments. While a long shot, Dell could fall further in the global market, if Acer continues to grow and Dell fails to reverse the current downward trend.

"Hypothetically, if Acer grows like they say they are, then it's possible there could be a change in the No. 2 vendor," IDC analyst Doug Bell said.

In the first quarter, Dell shipped 1.1 million more PCs than Acer, giving the former vendor a 13.6% market share to Acer's 11.6%, according to IDC. However, market researcher Gartner had the two vendors in a virtual tie, with Dell leading by only one-tenth of a percentage point.

Based on IDC's numbers, Acer would have to perform well to beat Dell. "Over a million units is a lot of share to take from a stable, mature player," Bell said. "It is possible, but it would be very tough."

Overall, the global PC market is expected to be tough for all vendors this year. IDC is projecting negative growth in the first half of the year, while the second half is expected to be flat. For the full year, IDC has forecast a drop of 4.5% from 2008.

The one area of the PC market expected to grow is shipments of netbooks, which are mini-laptops optimized for Web browsing and costing as little as $300. In that market, Acer has an advantage.

In 2008, Acer and Asustek were the leaders in the netbook market. However, Dell, Hewlett-Packard, and Lenovo did not ship their first products until last year, so standings could change this year.

"Acer and Asus didn't have much competition in 2008," Bell said.

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