Netbooks are eating up Acer’s revenue

Sometimes your strength becomes your weakness and that’s just happened to Acer. Despite posting an impressive sales figure in the second quarter, the world’s third largest PC brand had poor turn over. In its statement, Acer said that it expects shipments to jump up to 40% in the second-half of the year compared to first half. In the April-June quarter, the company earned a net profit of T$2.3 billion which is a 20% drop compared to its T$2.9 billion revenue in the same period last year. What is the cause of such fall? The low priced computers produced by the company are the main culprits. Reuters reports:

Acer leads the pack in the netbook PC segment - one of the brightest spots in the weak technology sector this year -- with research firm IDC expecting shipments to jump about 127 percent this year in a largely steady overall PC market.

"The reality is that prices are coming down, and a major cause for the falling prices is netbooks," said Edward Yen, a UBS analyst. "It seems to me that they're selling plenty of computers, but all cheap ones."

Acers revenue also fell 5% to T$119 billion despite their impressive sales figure. According to Vincent Chen, analyst, Yuanta Securities, the coming months are very much important for the company because Microsoft is releasing its next generation OS MS Windows 7. Release of such softwares basically boosts PC sales. As the popularity of the netbooks are rising it would gradually affect the sales of regular laptops.