Acer cautious on tech recovery in H2

TAIPEI: The chairman of Taiwan's largest personal computer firm, Acer Inc, on

Wednesday warned of poor recovery momentum in the second half for the global

high tech industry as it crawls back from last year's slump.

"The industry has become mature and the (PC) growth rate is very

limited.... You cannot expect the overall high-tech industry to have a very

promising second half," Stan Shih, the chairman of Acer, told foreign

journalists at a tea party.

Shih's remarks mirror those of the chief operating officer of Dell Computer,

the world's second-largest PC maker, who said on Tuesday that Dell had not seen

a pick-up in PC demand though it would still be on target for earnings and

revenues in the second quarter.

Shih added though that Taiwan tech companies could survive stiff competition

and continue to expand market share through innovation and efficiency. "You

have to improve your competitiveness and leverage your strengths. I think IT

services are a new opportunity," Shih said, referring to Acer's new

diversified tech-service business.

As a part of its restructuring efforts, Acer invested US$1 billion late last

year in e-services like mobile data services, remote server management, and

certificate authentication. In late 2000, Acer streamlined operations and split

itself in two: one half dedicated to Acer branded products and services with an

emphasis on Asia and China, and the other -- Wistron Corp -- to contract

manufacturing, or producing for other brands.

Acer will also launch more new Acer-branded desktop and notebook computers in

coming months to boost revenues. The company said last month its third-quarter

sales would rise 10 per cent over the previous quarter and could see operating

profits beginning in June after breaking even in May.

(C) Reuters Limited.