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.