Partners Cheer Acer Founder's Return, Say Shih Can Turn Company Around


Acer is bringing back its founder in an attempt to halt the No. 4 PC maker's downward spiral as it struggles to adapt to a shifting IT landscape, the company said Thursday.

Just two weeks after naming Jim Wong as its next chief executive officer, the Taiwanese PC maker now said founder Stan Shih is taking over the chairman and president roles effective immediately. Acer, with global revenue of $63 billion in 2012, said Chairman and CEO J.T. Wang and Corporate President Jim Wong have both resigned from their positions in light of huge third-quarter losses that topped $446 million.

Acer said it will "relinquish the position of the CEO" in an effort to "boost the company’s decision making efficiency" of Shih, who was officially appointed Acer's chairman and interim corporate president.

[Related: Acer CEO Resigns After Tough Third Quarter]

Acer's executive shakeup, said Larry Gold, president of Computer-EZ, a Mendon, Vt.-based Acer partner, is a much needed step in the company's effort to bring some mojo back to the ailing PC maker that has had the wind knocked out of it when its booming netbook business went bust with the advent of the tablet.

"Acer systems are rock solid. What the company is missing is consumer buzz and proper incentives to motivate partners to make the case to customers to buy more Acer hardware," Gold said. "Acer has done a great job of being the low-cost option at Wal-Mart, Staples and K-Mart, but if they want to survive they need a stronger argument for the channel to go to market with," he said.

Analysts say hiring back Shih allows Acer to quickly put a turnaround plan in place with someone who's already integrated with Acer and knows the business and challenges.

"Recognizing the company's shortcomings and taking action to address them quickly should help," wrote Loren Loverde, vice president of the worldwide PC Trackers team at IDC, in an email to CRN. "Still, it's a competitive time in the market with declining PC shipments, lots of product changes and competitors, so I would not expect volume to improve dramatically short term."

Acer reported a loss of $446 million for its third quarter earlier this month. In an effort to save $100 million in 2014, Acer said it plans to lay off 7 percent of its staff and will take a one-time charge of $150 million this quarter.

Priorities for rebound, Loverde said, include streamlining operations such as distribution, and successful product design around new competitive dimensions like touch, convertible and thin systems. "Acer is still No. 4 globally, with a good brand, channels, so they've got strengths to work from, but they need to respond faster to market changes and competition," Loverde wrote.

Allen Falcon, CEO of Cumulus Global, a Westborough, Mass.-based cloud-focused solution provider, a Google Apps partner and one of Acer's 14,000 global partners, said "Shih's return to Acer will hopefully help to restore its product management efforts, by instilling an approach more driven by customer needs."

"Acer's early Chromebooks, for example, had traditional hard drives. Not suited for the exploding K-12 market, Acer lost an opportunity to earn a larger piece of the growing market share," Falcon said.

Acer's new C710s and the soon-to-ship C720s are more in line with customer needs and could pose a serious threat to market leader Samsung, he said.

Acer co-founder George Huang has also joined the executive management team to help "lead" the company, the company said.

Losses in Acer's PC business have been staggering, according to IDC. In June, the computer maker experienced a 33 percent drop in worldwide PC shipments compared with the prior year. That was the worst decline among PC makers Lenovo, Hewlett-Packard and Dell, each of which also saw drops in the retracting PC market. Acer has been hit particularly hard by falling netbook sales and anemic demand for its pricier Ultrabooks, according to the research firm.

"Nobody is going to work harder to help Acer succeed than Shih, its founder," said Computer-EZ's Gold.

PUBLISHED NOV. 21, 2013