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Acer CEO trys to explain company's woes

TAIPEI--Jason Chen, Acer Inc.'s (宏碁電腦) new corporate president and chief executive officer, has attributed the struggling PC maker's losses over the past three years to its early entry into Ultrabooks and touch-enabled notebook PCs.

Chen said on Monday that Acer's biggest problems today result from committing too many resources over the past two years to thin-and-light Ultrabook PCs and touch panels used in computers, even if they were not necessarily the wrong directions.

“Acer invested too early in the two sectors, leading to its challenges since then,” he said at his first meeting with the media at Acer's headquarters in Taipei.

“What we need to do now is to dig ourselves out of the hole,” Chen said. “There are no magic bullets. We need to focus on the fundamentals.”

Chen, a former senior vice president of worldwide sales and marketing at Taiwan Semiconductor Manufacturing Company (TSMC, 台積電), the world's largest contract chip maker, was appointed CEO by Acer's board of directors on Dec. 23.

The new CEO said that before joining the company, his impression of Acer was that it was better at controlling costs than doing research and development, but he has since found that not to be the case.

Acer has assembled a big research group of over 1,300 engineers, which is likely to grow further in the future, he said.

The company also applied for 130 technology patents in Taiwan in the third quarter of last year, ranking it second behind only Hon Hai Precision Industry Co. (鴻海精密), the world's largest contract electronics maker, Chen said.

Acer Puts Stakes on Cloud Technology For Renaissance

Based on these solid fundamentals, the new CEO said he remained optimistic about Acer's future, especially as it shifts its focus from hardware manufacturing to cloud technology in a bid to revive its waning fortunes.

Acer said in a statement on Dec. 18 that it will combine its strength and size in PC manufacturing with its cloud technology, allowing users to build their own cloud services for purposes such as storing music and photos on all Acer PCs and mobile devices.

The company's management reshuffle, which led to Chen's hiring and the return of Acer co-founder Stan Shih as chairman, was triggered by the company's after-tax loss of NT$13.12 billion (US$443.5 million), or NT$4.82 per share, in the third quarter of 2013.

A majority of the loss came from writing off intangible assets.

The company's consolidated revenue for 2013 as a whole fell 16.16 percent from a year earlier to NT$360.19 billion, the steepest decline among the world's top five PC makers.

"We are now facing a quite challenging situation. It's not easy for anyone or any company to deal with such a challenge," Chen said.

"As we shift to cloud technology, the purpose for selling our hardware devices will not be aimed at gaining market share," he said.

"We will seek opportunities to echo our strategy of building your own cloud."

Acer shares closed down 0.81 percent at NT$18.45 Monday on the Taiwan Stock Exchange.

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