Acer UK PC sales hit hard as market tumbles in Q4

Acer UK's PC business is under increasing pressure after IDC data showed sales collapsed 30% in Q4 - following its drop in the previous three months - as the slowdown in consumer demand compounded existing inventory woes. The UK market was soft during the festive period, with preliminary numbers sho

Acer UK's PC business is under increasing pressure after IDC data showed sales collapsed 30% in Q4 - following its drop in the previous three months - as the slowdown in consumer demand compounded existing inventory woes.

The UK market was soft during the festive period, with preliminary numbers showing a 7% fall year-on-year with a weak turnout of high street shoppers blamed for the drop despite a spike in Boxing Day sales.

"Christmas trading was pretty slow," said Eszter Morvay, research manager at IDC, "inventory has been building up after the really weak Back To School period and shopping and shipments [in Q4] were hit further by the weather."

Consumer desktops and notebook sales declined 8% and 9% respectively, as business desktop shipments were flat and commercial portables fell 5%, flouting expectations of a continued refresh in the corporate market.

IDC calculates its numbers of sales into the channel and Acer, whose business model is based on filling distributors' warehouses with stock, was at the mercy of its reliance on the consumer market as sales fell 30%, some 220,000 fewer units.

Morvay said Acer's growth in 2009 was fuelled by the telco channel flogging its netbooks which had now "fallen off the edge of a cliff" and thriving consumer space that started faltering in Q3, demonstrating its portfolio limitations.

"Acer is working with high inventory so were more exposed when the decline happened, it didn't anticipate a huge cannibalisation of tablet PCs... Acer is carrying that inventory forward," she said.

Of the other top three vendors, Dell shipments declined 3% year-on-year but achieved sufficient sales to knock Acer into third spot. UK market leader HP enjoyed a strong quarter with sales up 19% with uplift across desktop and notebook.

However, Acer is not alone in the glut issue according to a distributor: "Acer is in some pretty good company, every vendor is running a little too high."

"One of the problems is that to cut costs, PCs are shipped by sea which takes 12 weeks so it's already en transit when the channel crunches the brakes at the front end and it all piles up," he said.

Acer refused to comment.

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