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By | Paul Kunert 17th October 2011 13:32

Gartner: Acer's glory days may be over

Shipments slide despite rallying PC market

Gartner reckons the inventory debacle at Acer may have permanently cost the vendor its position near the summit of the PC market.

According to Q3 worldwide numbers from Gartner, Acer sales into the channel declined 23.2 per cent in a market that grew 3.2 per cent.

As a result, the Taiwanese giant remained in fourth spot behind Dell – which was shoved into third place by Lenovo after sales fell 1.4 per cent – with market share falling to 10.6 per cent from 14.2 per cent a year ago.

"Acer shipments declined 30 per cent in the first three quarters of 2011," said Gartner research director Ranjit Atwal. "How can a company survive when that level of volume disappears? It has got to look at rationalisation."

This is a far cry from the firm that was giving HP a run for its money and pushing to become the biggest shifter of PC boxes.

Acer used to pay well to get the channel to carry its stock, and though this often made some disties feel nervous about the cash tied up in warehouses, customers' appetite for low-cost notebooks meant inventory turned frequently and the model worked.

A year ago the consumer market began to splutter, but Acer's supply chain was not flexible enough to accommodate the slowdown and containers filled with notebooks, which kept on coming by boat, adding to the inventory mountain.

This came to a head in March when CEO Gianfranco Lanci left due to a dispute with management over future direction. Then in June, Acer revealed it had found stocking anomalies and wrote down $150m of inventory.

"Acer could continue to decline and could even disappear, that is not unfeasible as it has lost credibility in the channel and resellers/retailers have viable alternatives in the market," Atwal told The Reg.

"Now that Acer can't dominate the channel and cannot price products lower than rivals, it has lost the competitive edge."

This is a sad turn of events for probably the only vendor on the planet that exclusively uses the channel to reach customers, be they consumer or SMEs.

In Q3, HP remained the largest PC supplier in the world and in spite of the uncertainty surrounding its Personal Systems Group, grew sales 5.3 per cent. It was followed by Lenovo, which outpaced the market to grow 25.2 per cent. ®

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