Acer CEO Resigns as Tablets Eat Into PC Business

Acer President and CEO Gianfranco Lanci resigns after disagreements with board members over the future path of the PC maker.

Acer, which over the past couple of years has competed with Dell for the position of the world's second-largest maker of PCs, is looking for a new president and CEO after Gianfranco Lanci resigned March 31 following a disagreement with the board of directors over the direction of the company.

Lanci's resignation came after a meeting with the directors, in which the two sides could not agree on several aspects of Acer's future, from growth to customer relations to brand management, the company said in a statement. The resignation is immediate, and J.T. Wang, currently the company's chairman, will fill in as acting CEO until a permanent replacement is found. Lanci had been talking with the directors about the company's future for months, without being able to come to an agreement, the company said in a statement.

Lanci had been with Acer since 1997, was appointed president in 2005 and became CEO in 2008.

The resignation came less than a week after Acer executives lowered their first-quarter PC sales forecast from a 3 percent increase over the same period last year to a 10 percent decline. Executives attributed the troubles to weaker demand in both the United States and Europe. The company's PC sales also reportedly have been hurt by the rise in popularity of tablets, led by Apple's iPad.

Acer also was a leader in the netbook space, which was popular during the global recession but has begun to wane with the growth in tablets. Apple, which has held a dominant position in the market since introducing its iPad last year, now faces a host of competitors-including Hewlett-Packard, Dell, Samsung Motorola and Research In Motion-joining the fray.

Acer in April is expected to release its Android-based Iconia Tab A501 4G tablet, which AT&T announced at the CTIA Wireless 2011 show it will sell.

"This tablet is packed with features that will enable HD gaming and exceptional video playback," David Haight, vice president of business development for AT&T's Emerging Devices unit, said in a statement at the time of the carrier's announcement. "It offers a first-class, on-the-go entertainment experience."

Acer's Wang said the company will look to expand its reach beyond PCs, though with the understanding that the traditional form-factor still is central to the company's future.

"The personal computer remains the core of our business," Wang said in a statement. "We have built up a strong foundation and will continue to expand within, especially in the commercial PC segment. In addition, we are stepping into the new mobile device market, where we will invest cautiously and aim to become one of the leading players."

The company needs to adapt to the changing conditions of the market, he said.

"We have to change our business strategy as the PC industry landscape has changed a lot with the rise of tablets and multiple PC operating systems," Wang told the Wall Street Journal.

Acer last year also unveiled its Android-based Stream smartphones and the LumiRead e-reader device. In addition, the company is making another push into the data center. In February, the company unveiled a line of x86-based server and storage systems powered by processors from both Intel and Advanced Micro Devices.

Given the evolving nature of the PC industry, Acer's directors made the right decision in accepting Lanci's resignation, according to company founder Stan Shih.

"The board had no choice but to make a decision," Shih said in an emailed statement to Bloomberg. "Faced with the changes in the environment, restructuring and changes are unavoidable processes."

Lanci's resignation should not impact Acer's operations, and all the employees have been alerted to the change. Wang told the Wall Street Journal that other executives with the company have agreed to stay with Acer, despite Lanci's resignation.