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-1-
1. Business Report to Shareholders
Acer was faced with intense competition from the top PC players in 2006, yet in spite of
this, Acer Inc. consolidated revenues reached NT$ NT$369.09B (US$11.32B), up 16%
from the previous year and reached 92.3% of the annual target; while our profit after tax
(PAT) of NT$10.22B (US$313.47M) and earning per share (EPS) of NT$4.45 both hit
targets. In addition, operating income of NT$7.81B (US$239.66B) exceeded on the
previous year and hit 72.5% of target.
Although the PC industry’s intense price competition directly influenced Acer’s revenue
and operating income, we still achieved significantly higher growth rates than the industry’s
major players. Acer endured a tough period and has emerged winning, proving once again
that our business model is adaptable to volatile market changes. Hence, we are confident in
securing the No. 3 global PC ranking during the course of 2007.
In 2006, the Acer brand business achieved commendable growth around the world. For
global PC unit shipment, Acer retained the No. 4 position for Total PCs, rose to become the
No. 3 notebook, and grew significantly for desktop PCs to rank at No. 4; all with highest
growth rates among the top five vendors. For LCD monitors, Acer also maintained the No. 4
position.
Regionally, in EMEA (Europe, Middle East and Africa) Acer ranked No. 3 for Total PCs
and stood firmly as the No. 1 notebook brand. In Asia Pacific, Acer notebooks obtained No.
1 ranking across five countries. In the target growth markets, our growths in the U.S. for
notebook, desktop and Total PCs were the highest among the top ten vendors; and in China
we climbed to the top five for notebooks.
Over the recent years, Acer has established an effective business model; this sustainable and
evolutionary channel business model has laid the foundation for our growth and profitability
forward. In fact, the PC industry’s channel model has gradually become mainstream
practice to share equal presence with the direct model. We expect the channel model will
continue to expand, with Acer staying committed to our channel partners.
Acer has set itself clear goals for 2007: aim for better balance of revenue contribution from
our regional operations; establish distinct product differentiation to satisfy commercial and
consumer customer needs; build closer ties with key component suppliers; lower operating
expenditure percentage while company grows; and develop the LCD TV and new handheld
PC devices. Acer shall persist in researching and developing Empowering Technology that