Acer Inc (宏碁), the second largest PC vendor worldwide, plans to boost sales of more-profitable servers this year as it takes on Hewlett-Packard Co and Dell Inc in offering computers to companies.
“You can’t be a PC player just on consumer, we need to be a PC player in all segments,” Gianfranco Lanci, president and chief executive officer of Taipei-based Acer said in a Feb. 5 interview. “This year, you’ll see a big effort from our side on commercial.”
Acer overtook Dell in the third quarter to become the world’s No. 2 PC company by offering low-cost Aspire One netbooks and higher-priced Ferrari-branded notebooks aimed at consumers. Servers, more powerful computers used to store information and manage networks, will account for around 4 percent of Acer’s sales this year and offer profit margins up to double that of its other products, Lanci said.
“That’s very aggressive and would be good news if they can make it work,” said Calvin Huang (黃文堯), an analyst at Daiwa Securities Group Inc in Taipei. “The corporate market is going to pick up and consumer will continue to climb, so they”ll have a double engine for growth.”
Acer released so-called blade and modular servers in November, the first move in its plans to offer a full line-up of servers by the end of this quarter, Lanci, 55, said. That will also help it win commercial clients for the company’s desktop and notebook computers, he said.
Global server shipments dropped 17.9 percent in the third quarter from a year earlier as companies cut budgets amid the global recession, researcher IDC said in a December report. IBM Corp led the market by revenue, followed by HP and Dell, it said.
Shipments of computers, excluding servers, climbed 2.3 percent over the same period as Acer’s 14 percent market share took it to second place behind HP, IDC said in a separate report.
Gross margin for servers, which measures the percentage of sales less the cost of goods sold, will be 15 percent to 20 percent, Lanci said. The figure for the company as a whole was 10 percent in the third quarter, Bloomberg data showed.
“Maybe they expect the server segment will be booming in coming years and they want to join,” said Angela Hsiang (向子慧), an analyst at KGI Securities Co (凱基證券) in Taipei. “It will need some time. Because they didn’t do this product before, strong R&D capability is still needed.”
HP got 13 percent of its revenue last year from its servers and storage division, with 11.3 percent of its operating profit coming from that unit, while Dell got 12 percent of its revenue from its servers and networking division during the third quarter, to Bloomberg data said.
“Acer may need to spend some money to build up a distribution network for servers, so it may not be very profitable initially,” Huang said.
Acer’s sales will be aided by a 30 percent increase in its marketing budget, vice president of marketing Gianpiero Morbello said in a separate interview.
Revenue will climb around 15 percent this year, with shipments of notebooks to increase 35 percent to 40 percent, Lanci said.
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