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Wednesday, March 30, 2011, 01:00 pm PT (04:00 pm ET)

Acer to "overhaul operations" in the wake of Apple's iPad

The founder of Acer, the second largest PC maker globally, has acknowledged that the company must overhaul its operations to focus on profit margins rather than market share in reaction to the success of Apple.

A report by China Economic News stated that Stan Shih, founder of the Taiwan PC giant, made his comments after two quarters of downward revisions of sales targets.

Acer just released new outlook calling for a ten percent decline in sales over the next quarter, rather than its original estimate of three percent growth. That announcement sent the company's stock down seven percent, the daily limit for the market, for two days in a row.

The report noted that Acer "has been striving to become the world`s largest PC vendor, in the belief that the goal can help it achieve economy of scale and garner higher margin."

Acer had invested in netbooks particularly, achieving rapid growth in its PC sales via volumes of the low-cost mini notebooks hit hardest by the arrival of Apple's iPad last summer. Hype around netbooks has since nearly vanished.

Shih added that the 'honor of the world`s largest PC vendor may be achieved at the expense of profit margin,' and suggested that the PC industry "should not single-mindedly pursue volume growth, and should extend its operation to the field of service, just like what Apple has done," according to the report.

Competitors hate Apple's iPad, iOS

Last fall, Acer's chairman JT Wang predicted that Apple's share of the tablet market would plunge from near 100 percent to just 20 to 30 percent because of the "closed platform" of Apple's iPad iOS, noting confidence in Android in saying that it "simply need a little more time before it turns strong."

HP and Dell recently made similar remarks assailing the iPad and Apple's iOS, while Microsoft's chief research and strategy officer Craig Mundie described the iPad as possibly being a short-lived fad positioned between smartphones and portable computers.

Both Gartner and IDC ranked Apple fifth in US PC Shipments in the fourth quarter of 2011 based entirely upon Mac sales alone (which made up 8.7 to 9.7 percent of the PC market, according to the two firms).

When adding in iPad sales, Apple became the top US vendor at the end of 2010, with 24 percent of all US PC sales, and enters striking distance of Acer and Dell for the number two PC spot globally.

Apple continues to essentially own the "media tablet" market, even when low cost devices such as dedicated ereaders are mixed in, creating consternation for both PC makers and general consumer electronics makers.