Acer to ditch OEM PC business?

Head for the hills...

Acer Inc. is considering dumping its OEM PC business.

The Taiwanese technology star is suffering along with the rest of the industry from the slump in consumer spending on computers, and is thinking of stopping making PCs for other people in a bid to streamline.

An Acer senior VP, Philip Peng, said the move had been suggested to the company, but its execs were still in the throes of deciding what to do, InfoWorld reports.

The revelation comes in the same week as Acer said it was scrapping assembly plants in the US and Germany - it will now have a total of twelve overseas factories, down from more than 30 last year. This has resulted in a third of its workforce in the US, Europe and Latin America losing their jobs. The company is also mulling over the sale of $590 million of non-core assets.

Acer is expected to officially reveal plans of a restructure - which is also expected to include a reshuffle at exec level - by the end of this month. It has also warned that its US and European businesses will post losses of around $20 million each for 2000, while its Central and South American operation is bracing itself for losses of $15 million.

Acer, one of the plethora of IT companies to have issued profit warnings this quarter, wants to cut its reliance on contract manufacturing. Its OEM business currently hauls in 55 per cent to 60 per cent of revenue - in 2001 Acer aims to slash this to 50 per cent. ®

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