By Eva Dou
TAIPEI--Acer Inc. (2353.TW) plans to launch a smaller 8-inch
Windows tablet next month, the first confirmed device from a
Microsoft Corp. (MSFT) hardware partner that will compete directly
against smaller tablets from Google Inc. and Apple Inc.
Microsoft said last month its hardware partners will launch
smaller Windows 8 devices in coming months. The software giant is
also planning its own brand 7-inch tablet, people familiar with the
matter told The Wall Street Journal in April.
Microsoft's new touch-controlled operating system Windows 8
marks a radical overhaul, but has so far seen low penetration rate,
partly due to the high price of the devices.
The new Acer tablet has not been launched officially but a
product listing was briefly leaked on Amazon.com last week before
being removed. An Acer executive who declined to be named confirmed
the tablet is on the way but didn't elaborate on the device's
features.
Acer, the world's fourth-largest PC maker by shipments, was one
of Microsoft's most vocal critics last fall, when the software
giant began competing with its hardware partners through the launch
of its own brand Surface tablet.
The Taiwanese PC firm has recently turned more optimistic about
its long-time software partner, with hopes that this year's Windows
8 devices will help it recover from two consecutive years of
full-year net losses. But the global environment remains
challenging, with PC demand in steep decline.
Acer also said Tuesday its first-quarter net profit rose from a
year earlier on foreign exchange and stock disposal gains, although
its operating margin sank to a razor-thin 0.03% amid market-share
loss to competitors like Lenovo Group Ltd. Its operating margin
hasn't surpassed 1% in two years.
The company last year began efforts to shed its image as a maker
of low-end devices, putting more efforts into design and hiring a
new chief marketing officer. Acer president Jim Wong said in March
that the company will double its percentage of revenue spent on
marketing and research this year.
But analysts say Acer's high-end products so far haven't been
hot sellers because the Acer brand can't command such a
premium.
"Their product design has improved a lot, but the price of some
of their devices were too high last year," said Yuanta Securities
analyst Vincent Chen. "Their brand image is still not that
attractive."
The company is looking toward low-cost tablets to help it boost
shipments this year, Mr. Wong said in March.
Acer reported a first-quarter net profit of 515 million New
Taiwan dollars (US$17.4 million) with foreign exchange and stock
disposal gains boosting its nonoperating income. A year earlier, it
posted net profit of NT$331 million.
Revenue fell 18.6% to NT$91.97 billion from NT$113.04 billion a
year earlier, the company said.
Acer will disclose details of its first-quarter earnings at an
investor conference Wednesday.
Due to a change accounting rules, some previously reported
figures will be revised, the company said, without disclosing
figures.
Write to Eva Dou at eva.dou@dowjones.com
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