Is Acer unprepared for decline of netbooks?

Taiwanese manufacturer has tablet in the works, but no release date

Waiting for people to "return to their senses" has never been a good business strategy, not when there's money to be made from trends and novelty.

So let's hope for his company's sake that Acer Inc. chairman JT Wang was being rhetorical when he said tablet users would "return to their senses" and go back to traditional computers.

Of course, even if that were true, there's no guarantee consumers would forsake tablets for netbooks, which really is the point of Wang's dismissive (read: defensive) comments. In fact, the problem facing the Taiwanese manufacturer is that it's the market leader in netbook sales, and netbook sales are declining.

IDC predicts netbook sales this year will decline 2 percent from $14.3 billion in 2009, and fall even more in 2011.

As this Wall Street Journal article explains, Acer derives an estimated 14 percent of its revenue from netbooks. Based on Q2 total revenue of $4.9 billion, that's $686 million in quarterly sales from netbooks.

Even in the face of a dwindling netbook market, Acer is in good health. On Wednesday the company reported third-quarter net profit of NT$5.28 billion (a new record), up 11% from last year's NT$4.75 billion.

But revenue dipped to NT$167.2 billion from NT$167.6 billion a year earlier. Wang said tablets did not contribute to Acer's revenue decline. Hey, if that's what he wants to believe.

Fortunately for Acer, until consumers "return to their senses," the company has plans for its own tablet, a 7-inch device running on Android. Unfortunately, there's no firm release date, and Wang downplayed any urgency for Acer to get a tablet device into stores, apparently confident that senses will remain unreturned in the foreseeable future.

Tablets, shmablets. Yeah, we'll get around to sellin' them sometime. Whenever. It's sort of a refreshing attitude. Not sure if shareholders would agree.

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