Bloomberg/Taipei


When Jason Chen took over as chief executive officer at Acer Inc a year ago, he was handed

a three-page, colour-coded list of problems at the ailing PC maker. He shoved the memo in

a drawer and never looked at it again.
Instead, the 53-year-old focused on the positive. Chen crafted a 100-day plan after

reading books about turnarounds at International Business Machines Corp and Japan Airlines

Co. He met with employees at Acer’s Taipei headquarters to share ideas and then headed

overseas to bolster morale.
Defying predictions of a PC industry in decline as consumers shift to mobile devices, Acer

is betting on next-generation models, including inexpensive laptops that run Google Inc’s

Chrome software and tablet-laptop hybrids, while expanding into phones and cloud

computing. With the company’s shares rising 17% last year, Chen is declaring his

turnaround complete and predicting a return to sales growth.
“Any and every company has a lot of problems,” Chen said during an interview at Acer’s

headquarters. “I pay much more attention to what are the strengths of the company and how

do we use the strengths to capture opportunity.”
Acer hasn’t seen much of Chen’s brand of optimism lately. In the three years before he

came on, the company’s stock tumbled 80% as the PC market slid and profits evaporated. The

company ultimately took $450mn in write-offs, and the previous management team resigned.
Chen has “delivered what’s needed to take the first step in turning around the company,”

said Vincent Chen, at Yuanta Financial Holding Co, who rates Acer a hold. “He’s been

successful in controlling the losses and turning to profit.”
Although Jason Chen was born in Taiwan, he’s travelled the world for his career. He worked

at IBM, Intel Corp and most recently Taiwan Semiconductor Manufacturing Co before joining

Acer. A salesman by training, he emphasises words such as “optimise” and “stabilise.”
Asked why he accepted the proposal from Acer founder Stan Shih to lead the company, Chen

said it was the size of the undertaking that attracted him. “The key word was

‘challenge,’” he said in the December 16 interview. “The highest-level challenge in

business is turnaround.”
Having bled cash, market share and revenue during the past three years, Chen wants to take

the former notebook-computer leader back to basics. He set up regular Monday morning

meetings to model revenue expectations for the coming six months so he can decide how much

to spend.
Acer’s experience is in the “not-so-comfortable” business of making PCs, Chen said. Rather

than shifting to completely new businesses, he wants to make steady improvements within

PCs while expanding in related areas. By exploiting the core business, Chen said Acer

would return to annual revenue growth this year for the first time in five years.
“The turnaround is pretty much done,” he said. This year, “we should no longer talk about

turnaround.”
Acer sees its biggest chance in the nascent market for Chromebooks – low-cost laptops that

run Google’s operating system and eschew expensive internal storage drives. Acer has about

35% of the market, according to researcher International Data Corp, and figures growth in

the category will lift its fortunes. The company announced what it said was the industry’s

first 15.6-inch Chromebook January 3 in Las Vegas. Chromebooks probably won’t be a “cure-

all,” said Bryan Ma, a PC analyst at IDC in Singapore.
“It might help stabilise things to get them back up onto their feet in the short term,” he

said. “Ultimately, the bigger question is how they plan to address product categories

beyond the PC.”
Convertible notebooks – with detachable keyboards that allow them to transform into

tablets – let Acer cater to those who’ve been dumping PCs for Apple Inc iPads. Meanwhile,

high- end models will help the company attract the gamer crowd that hasn’t yet given up on

computers entirely.
Acer is also venturing into smartphones. From a small base, the company has tripled its

sales during the past three years and plans to keep its focus tight, exploring different

markets and strategies to find a successful formula.
That low-key, small-scale approach will allow Acer to ride out a wave of hyper-competition

that’s likely to wipe out rivals, Chen said. It’ll also help the company stay alive long

enough to realise Shih’s dream of building a cloud-computing ecosystem that Acer’s founder

first conceived of a decade ago.
Relaunched last year under the Build Your Own Cloud tag, Acer’s vision is to let users

host their own data at home using the company’s software and hardware platforms, avoiding

the pitfalls that have seen bigger names fall victim to hacking and privacy breaches.
While Chen refused to grade his own first-year performance, investors and customers have

already bought into the sales spiel. Acer’s stock price, market share and shipments have

grown, and analysts are predicting its fourth-quarter revenue will show the first gain

since June 2012.
“I am a strong believer that when you face the sun, and move as fast as you can toward the

sun, the shadow will be behind us,” Chen said. “But if you keep looking at the shadow,

it’ll grow longer because the sun sets.”

Chen: Using company’s strengths to capture opportunity.