Acer reports strong Q1; says it fears HP, not Dell

Acer said its first quarter net profit nearly doubled from a year ago, and named HP as its most potent rival now, not Dell.

Acer reported its first-quarter net profit nearly doubled from a year ago despite strong competition in the PC market from rivals such as HP and Dell.

Net profit at the world's fourth largest PC company rose to $NT5.23 billion New Taiwan dollars ($US160.9 million), from $NT2.56 billion. Revenue increased 26 per cent from last year to $NT83.0 billion.

Competition in the PC industry heated up during the first quarter and should remain cutthroat throughout the year, executives from Acer said.

"It's been bloody fighting for the past three months," Acer's chairman, JT Wang, said, noting the company's rivals have all stepped up their efforts in Acer's key market, Europe.

But the company noted that only itself and HP gained market share during the first quarter, while Dell and Lenovo Group both lost.

"Our biggest competition in the US is not Dell, it's HP," Acer's president, Gianfranco Lanci, said. HP has stepped up its performance since its new CEO was installed, turning it into a more potent rival.

Dell lost market share during the first quarter, according to figures from market researcher, Gartner Dataquest, taking 16.5 per cent of the global market, down from 16.9 per cent in the first quarter a year ago. HP increased its share to 14.9 per cent from 13.8 per cent, and Acer jumped to 5 per cent from 3.9 per cent.

The Taiwanese PC company also said that Microsoft's delay in launching its Vista OS could hurt PC sales in the fourth quarter of this year, since some customers might put off buying new PCs until 2007.

Aside from the impact from Vista, Acer executives expect the PC market to grow at a rate just slower than last year.

The company said it's own sales in the US will likely double this year to about $US2 billion, while sales to China should quadruple from a year ago.

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Dan Nystedt

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