Taiwan-based Acer is taking the netbook market by storm, even as it posted a weaker-than-expected first quarter. President and CEO Gianfranco Lanci told analysts his company shipped more than five million netbooks last year, beating the 4.9 million sold by its competitor, ASUSTeK Computer, even though Acer started its deliveries six months after ASUS. Net Profit Drops 31 Percent But despite that success, Acer, the world’s third-largest computer maker, issued reduced growth forecasts for this year and said its first-quarter net profit dropped 31 percent. The company originally forecast 12 million to 15 million netbook sales this year, but dropped that to 10 million to 12 million. However, the new forecast includes an increase of as much as 40 percent in the latter half of this year compared to the same period in 2008. Netbooks are the hottest computer category on the market. With screens that are generally seven to 10 inches, the lightweight ultra-small computers usually sell for less than $500, do not have DVD drives, and are intended for more limited functionality than regular-sized notebook computers. The price point is a key factor in the growth of this new category, said Doug Bell, an analyst with industry research firm IDC. “In this economy, consumers are leaning toward lower prices,” he said, and buyers are using netbooks for limited applications like a second PC for the kitchen. Bell projects that these products, which his firm describes as “mini-notebooks,” will make up about 25 percent of total notebook sales this year. He expects the category to continue growing as a percentage of total notebook sales until it reaches a plateau in a few years. ‘Too Early to Say’ About Android The key problem for Acer, ASUS and others, said Information Technology Intelligence Corp.’s Laura DiDio, is that the profit margins on these lower-priced devices are relatively small,…

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Acer Leads Netbook Market as Profit Drops 31 Percent

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