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By | Paul Kunert 19th September 2011 12:45

Lanci's Lenovo move 'negative' for Acer – Morgan Stanley

Former CEO's shift to rival may damage Taiwanese giant

Lenovo's appointment of PC industry big hitter Gianfranco Lanci will heap further pressure on his former employer Acer, according to Morgan Stanley.

Lanci – who left the Taiwanese notebook giant Acer in March after a board-level disagreement over strategic direction – moved to Lenovo to consult on its consumer biz at the end of last week, as revealed first by The Reg.

"We think the arrival of ex-Acer CEO Gianfranco Lanci as a global consultant is positive for Lenovo. Mr Lanci's strength is in consumer channels in Europe, where Lenovo is weak," said Morgan Stanley in a report.

"We view this as a negative for Acer; it may weigh further on its business in Europe," the analyst added.

Lanci left Acer six months ago, when it was the world's second-largest PC maker – it is now the fourth. His departure came before the public admission that Acer had unearthed stock anomalies made worse by falling consumer demand for low-cost notebooks.

It then launched into the fondleslab market, where some of those retail sales shifted, but according to August shipment data from Context, Acer flogged nearly 44,000 tablets in August across UK, France and Germany while Apple pushed out 188,888 iPads.

"Acer has done pretty well," said Salman Chaudhry, analyst at Context. "It initially came out with one iteration but has built quite a range of 3G and non-3G variants."

However, the notebook inventory build-upacross channels in Europe is still being cleared and Acer does not expect to make a profit this year.

In contrast, Lenovo has enjoyed seven consecutive quarters of growth – it took time to get its act together following the acquisition of IBM's PCD – and is very much on the up, aiming to become the second-biggest PC monster globally by year-end.

But it needs to build a stronger route to market in the retail space to realise that ambition as consumer accounts for well over one-third of EMEA sales.

Lenovo held the ninth-largest market share in the region during Q2, and even the addition of Medion – the German PC vendor it acquired in June – only pushes it up to seventh. Dell is fifth with 7 per cent market share and HP is first, with 18 per cent.

"Lenovo is a long way from the top," said Ranjit Atwal, research director at Gartner. But Atwal did concede that Lanci knows Acer "inside out" and that he could perhaps exploit any current uncertainty surrounding HP PSG. ®

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