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Acer foresees boom in laptop sales

Taiwan's largest PC maker says notebook shipments will rise as much as 40 percent in the fourth quarter, with similar growth next year, as global demand picks up.

Taiwan's largest personal computer maker, Acer, said on Wednesday that notebook PC shipments will rise as much as 40 percent in the fourth quarter, with similar growth next year, as global demand picks up.

Intel's new Centrino technology, which offers wireless Internet capability, is also spurring Acer laptop sales that account for 65 percent of its revenue, Campbell Kan, chief of Acer's notebook product line, told Reuters.

"Our fourth quarter will (see) very good momentum growth for Acer and the worldwide PC business," Kan said on the sidelines of Computex, the world's third-largest computer trade show.

"The market has slowed for two years, and we are starting to see people buying PCs," Kan said.

The company is expecting notebook unit shipments to rise 30 percent to 40 percent in the fourth quarter to about 600,000 units from the same period last year, Kan said.

Acer, the world's sixth-largest laptop vendor, with 5.4 percent of the market, is also targeting about 50 percent growth for its notebook PCs next year, expecting to ship 2.8 million to 3 million units, versus 1.8 million to 2 million this year.

Like other PC vendors in Japan and the United States, Acer now buys from Taiwanese contract makers such as Quanta Computer and Wistron to cut costs.

Acer split itself in two in late 2000: Half dedicated to Acer-branded products; the other, Wistron, to contract manufacturing. Acer merged with its distribution arm, Acer Sertek, last March.

The company said despite the strong demand, profits were unlikely to grow at a similar rate due to growing competition.

Time to upgrade
Kan said after two to three years of slow growth, the PC industry was set for a rebound, as many computer owners upgrade to models that are faster and lighter and have more functions.

"Over the next three to five years, notebook PC shipment growth is expected to outpace desktops," Kan said, adding that part of that growth will be fueled by rising demand for laptops with wireless Internet access.

Laptops with Centrino wireless technology make up 40 percent of all Acer notebook computers, Kan said.

Taiwan, which makes more than half of the world's notebook computers, churned out about 18 million of the portable machines in 2002, up from 14 million a year earlier, according to the Market Intelligence Center (MIC), a local industry think tank. Shipments of desktop computers in Taiwan reached 25 million last year, flat from a year earlier, MIC said.

Within its laptop business, about 55 percent of Acer's revenue comes from Europe, 18 percent from Asia--excluding China--and the rest from the United States and China, Kan said.

Acer said 2003 net profit will fall 31 percent from last year, with the bulk of earnings coming from the sale of shares in affiliated companies. But the company still expects improvement in its core PC business, as restructuring moves pay off.

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