Acer to launch full line of mobile Internet devices in May

The company reported solid Q1 results and hopes to boost profitability with new MIDs

Acer plans to launch a full line of mobile Internet devices (MIDs) by the end of May in a bid to boost profitability and add to its mobile device offerings.

The company will also release version 4.0 of its Shell user interface on the new MIDs, said Gianfranco Lanci, Acer's CEO and president, at the company's first-quarter investors' conference. The devices will all include 3G wireless connectivity and will be able to interact together and share data, he added.

Acer executives declined to further discuss what kind of devices it would reveal. But the devices will clearly include a range of screen sizes, from tablet-sized devices to smaller gadgets with 7-inch screens or so. Pictures on the company's presentation materials indicated the range of devices, and Acer executives said they planned to put out a variety of devices with varying hardware configurations, not just Intel and Windows.

The company believes such new devices could be bigger profit drivers because people are intrigued by mobile devices these days.

Acer depends on mobile devices for its livelihood. Mobile computers such as laptops and netbooks accounted for 69 percent of its revenue in the first quarter. Netbooks, which Acer leads in, will continue to grow at a rate of nearly 50 percent this year, executives said.

"The netbook is still growing faster than the notebook," said Lanci. "I think growth with stabilize at 45 percent to 50 percent growth for the next two or three years."

Acer's revenue in the first quarter rose 36 percent year-on-year to NT$162.1 billion (US$5.2 billion). Net profit increased 63 percent to NT$3.29 billion. The results would have been better but the company faced bottlenecks in some shipments of components, Acer executives said. Acer was able to get all the components it needed, but the shipments came in later than hoped for sometimes.

Acer executives also said they do not expect to pay Android-related licensing fees to Microsoft. Microsoft has said it licensed some patents to mobile phone maker HTC for use on the company's Android-based smartphones, and the software giant is in talks with several other vendors over its patent concerns.

Acer is not in talks with Microsoft over Android-related patents, said Lanci. He said Acer is Microsoft's second-biggest customer, putting Acer in a better negotiating position on licensing-related matters than smaller companies such as HTC. Acer will ship 40 million or 50 million copies of Windows on its desktops and laptops, according to Lanci.

Acer uses Google's Android mobile OS on smartphones and at least one netbook that allows users to boot up either Android or Windows.

The company plans to redouble its efforts in China, and acknowledged having learned lessons in the market. The company plans to boost marketing spending in the nation and increase consumer research to make sure it's putting the right components on devices there. Chinese users prefer larger screens and always look for independent graphics chips, said J.T. Wang, chairman of Acer.

"I think this time we have the right approach," he said. The company has set a goal of US$1.5 billion in revenue in China this year.

Most of Acer's revenue comes from Europe, which accounts for 50 percent, with 27 percent from the U.S., while the Asia-Pacific region made up the majority of the rest, including 5 percent in China and Taiwan. Acer hopes to boost the China figure to around 8 percent.

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Dan Nystedt

IDG News Service
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