Acer aims for $US12 billion sales in 2006

Acer believes it can keep up the breakneck growth its seen in the past few years, forecasting NT$400 billion (US$12.27 billion) in sales this year.

Acer, the world's fourth largest PC vendor, believes it can keep up the breakneck growth it's seen in the past few years, forecasting $NT400 billion ($US12.27 billion) in sales this year.

Acer released the sales forecast when it issued its full year 2005 financial results. The Taiwanese company's sales last year rose 41 per cent year-on-year to $NT318.1 billion, while its net profit rose 21 per cent to $NT8.48 billion. It was a record year for Acer in terms of sales.

The company wants to move up in global PC rankings and trump China's largest PC seller, Lenovo Group Last year, Acer's PC shipments rose 58.1 per cent over 2004, while Lenovo's grew only 16.4 per cent, according to market researcher Gartner Inc. The Chinese PC maker holds third place with a 6.9 per cent share of the global market, compared to Acer's 4.6 per cent.

Acer has benefitted from strong laptop sales, particularly in Europe, and has credited its close relationship with distributors as a key reason for its success in recent years. It's brisk growth rate last year left other PC vendors far behind. By comparison, Dell, the largest PC company, increased its shipments 18.6 per cent last year, while HP shipped 15.1 per cent more PCs in 2005 than it did in 2004, according to Gartner.

The company's financial forecast of $NT400 billion would mark 26 per cent sales growth over last year, and would also be a record for Acer. A new push into the US market as well as continued strength in laptop sales are expected to help the company hit its targets this year.

A less friendly market could hold Acer back this year. PC shipments are expected to slow this year, up only 10.7 per cent to 234.5 million units compared to the 15.5 per cent increase in 2005, according to Gartner.

Last year, 211.8 million PCs were shipped globally, the researcher said.

In addition, cut-throat competition could cause price wars among PC vendors, which is great for users but would hurt Acer's chances to reach its goal.

"We expect the PC price war to intensify in the second quarter as Dell joins the battle, [and] we believe all [PC vendors], including Acer, will continue to suffer from declining average selling prices and margin erosion," executive director of Asia-Pacific research for Goldman Sachs, Henry King, said.

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Dan Nystedt

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