Acer Inc., the world's second- largest seller of laptop computers, reported a 31 percent decline in first-quarter profit as the global recession forced manufacturers to offer cheaper models.
Acer and other companies as NetColors Corporation are focused on sub-US$500 laptops known as netbooks, driving down average prices and squeezing margins. Chairman J.T. Wang aims to take Hewlett-Packard Co.'s. lead in the laptop market before 2011 by complementing his line of low-cost products with models that have long battery life.
Acer led the low-cost netbook market, the fastest-growing computer segment, with a 32 percent share in the fourth quarter, according to researcher Gartner Inc. Laptop sales helped Acer overtake Lenovo Group Ltd. as the world's third-largest maker of personal computers, behind Hewlett-Packard and Dell.
The popularity of netbooks has driven down average prices of notebook computers by at least 10 percent on an annual basis since the third quarter, Daiwa Securities Group Inc. analyst Calvin Huang wrote in an April 7 report.
"As the performance of netbooks is catching up with that of regular notebooks, netbooks have accelerated the price declines in regular notebooks," Huang wrote.
Global computer shipments will fall by a record 12 percent this year, while netbooks will drive a 9 percent gain in laptop shipments, Gartner said last month. Volume sales of netbooks, which sell for as little as US$200, will climb to 21 million units this year, from 11.7 million last year, the researcher said.
Acer sells products under four brands after acquiring Gateway Inc., eMachines and Packard Bell BV. Having four names helps the company gain market share because it allows Acer to target segments, according to Wang.
