It’s been such a freakish start to the year, hasn’t it? 2016 looks set to be the year that computer manufacturers and component designers start consolidating and shedding dead weight, as the economic boom created by China starts to slow, and the PC market shrinks further. Acer is the latest victim of this trend, recording a 66% drop in overall profits in 2015 compared to 2014, prompting the company to start restructuring efforts to boost efficiency and reduce costs further. Acer’s profits for the 2015 financial year totaled $18.5 million, bringing them close enough to breaking even, and not far enough to count as breathing room.
Acer’s transformation will split the company into two parts, with those divisions further segmented into different product categories. The only employee reshuffling announced by Acer seems to be limited at the top levels of management, and no job losses are expected from this move. Acer’s new structure is composed of “core business” and “new business”, which sounds catchy.
Core business covers most of what Acer’s been doing in the past, and it’s divided up into four departments which are listed below, along with the new bosses for these divisions:
- IT Products Business for notebooks, desktops and tablet PCs, and its R&D – led by Jerry Kao, president
- Digital Display Business including monitors and projectors – led by Victor Chien, promoted as president
- Server Products Business – led by Evis Lin, general manager
- Corporate Business Planning and Operations – led by Tiffany Huang, president
These departments are the bread and butter of Acer’s revenue, but at least one is definitely doing less well each year – that’s the PC market, which has been shrinking each year as tablet and laptop sales take over traditional desktop sales. Servers are also seeing less growth, and companies are starting to consolidate their purchases to only deal with other firms like Dell, Lenovo or HP.
The other two are fairly strong and continue to see growth or increased revenue, and the digital display business should see some action once Acer’s Predator laser projector hits the consumer market. The other half of the company, now called “new business”, targets markets that are seeing growth and innovation and don’t have an entrenched market leader, giving Acer room to find their niche and market it like crazy.
- eBusiness Business – led by Ben Wan, president
- BYOC and Smart Products Business – co-headed by presidents Maverick Shih and ST Liew
- Value Lab for the vertical and horizontal integration of technology for new businesses – led by Dr. RC Chang, chief technology officer
There’s also an in-house investment company that pops up within the new business category, responsible for managing the operation and investment of new businesses that Acer might acquire.
What’s welcome about these changes is that nothing is happening on a product level that we might need to worry about, at least for the current year. Acer’s still going to make their Predator laptops, they’re still going to be pushing out Windows Phones like the Jade Primo, and I’m still holding out for that 14-inch Predator notebook that I keep dreaming of.
However, a 66% profit drop is a tough situation for any company to deal with, and financial analysts in Taiwan say that while the restructuring might make things a bit easier for Acer, it still won’t change the overall negative outlook that the company faces in the long term.