UPDATE 1-Acer sees Q1 sales worse than expected; Q2 flat

Fri Mar 25, 2011 4:31pm IST

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* Q1 PC sales so far down 10 pct q/q, sees Q2 flat

* Negative indicator for the industry, supply disuption from Japan a big risk-analyst (Adds details, analyst comment)

TAIPEI, March 25 (Reuters) - Taiwan's Acer Inc's personal computer sales in the first quarter to date were 10 percent lower than the previous quarter due to weak demand in Western Europe and the U.S., in a worrying sign for technology demand.

Acer also said in a statement on Friday that it expected PC revenues in the first quarter to fall short of expectations. It also saw shipments of personal computers not growing in the second quarter from the first.

The disappointing outlook from the world's No.2 PC vendor comes after government figures showed orders for Taiwan's exports in February grew at the slowest pace since October 2009, a possible sign of a slowdown in the export-dependent economy.

Acer's figures may also be a negative indicator for the computer and contract manufacturing and design industry, analysts said.

"The notebook market is not doing well in general and Acer's sales performance may indicate other ODMs are not doing well either," said Angela Hsiang, an analyst of KGI Securities.

"Acer's first-quarter target of 3 percent sales growth was too aggressive, but a 10 percent drop is really bad since its fourth-quarter sales were already not good."

Acer said new tablet models scheduled to launch in the second quarter may improve sales, though Hsiang said the devices are not price-competitive enough compared with Apple Inc's iPad 2.

She said possible disruption of raw material supplies after the earthquake in Japan hurt companies there could also be a big downside for Acer's sales in the next quarter.

Acer posted unconsolidated sales of T$61.42 billion ($2.08 billion) in the first two months of this year, 35.6 percent lower than the same period last year.

Its rivals also reported harder times. Compal , the world's No.2 contract laptop PC maker reported a 21 percent fall in combined January and February sales over the same two months a year earlier, while those of the world's top contract laptop PC maker, Quanta , declined 10 percent. ($1 = 29.520 Taiwan Dollars) (Reporting by Clare Jim; Editing by Jonathan Standing)