Stan Shih — The final fling

Beneath the façade of a brilliantly successful entrepreneurial career, Stan Shih is an IT visionary whose ideas often carried a philosophical undertow.

Beneath the façade of a brilliantly successful entrepreneurial career, Stan Shih is an IT visionary whose ideas often carried a philosophical undertow.

Among the platitudes that have been attributed to him is the "Acer Way" philosophy which holds that "human nature is basically good". Consistently, Shih promulgated the need for long-term commitment to education, culture and social values.

Mindset and social culture needed to be changed, Shih insisted, in order to give way to innovation. Shih’s pet project - Taipei’s Aspire Park - in Shih’s own words, was to create a space where "young talents can develop their dreams and change the culture."

The story of Stan Shih is well-known: 20 years ago he started a small company with four partners to make videogame consoles. From that modest beginning grew one of the largest PC manufacturers in the world today. Its sales has been ranked 7th in the world. It is the only non-Japanese Asian company among the top 10 PC makers; its sales in the US alone accounts for 40% of its US$8.5 billion revenue in 1999.

Acer, however, is not without its troubles. Pressure is mounting especially last year when PC sales around the world slumped and Acer’s share of the US market dwindled. Observers have begun to question Shih’s two-year-old plan to restructure Acer into five independent units. Critics cited the conflict between Acer’s branded products and its contract manufacturing business and wondered if Shih should adopt sterner measures.

While putting on a brave front, Shih’s company has had to slash its earnings expectation for 2000. On the stock exchange, its stock plunged a hefty 80% over the past 12 months.

Perhaps the greatest challenge that Acer faces today is to re-invent itself in the face of what may be a worldwide maturation of the PC market.

The makeover began two years ago when Shih restructured Acer and refocused the company to concentrate on growing its Net services and software development businesses.

Like he did 20 years ago when he foresaw the boom in PC market and re-directed his company, Shih is doing it again with Acer. Only this time, the stakes are much higher, and the complexity of re-organizing a major multinational corporation is nothing like turning around a localized firm.

"We are also trying to leverage (China’s) human resources in engineering. We have established a small, 200-person software center in Shanghai and in the long run we are expecting to have thousands of software engineers in China."

On the other hand, Shih will have 1.2 billion Chinese to tap on from just across a narrow strait. “We are also trying to leverage (China’s) human resources in engineering. We have established a small, 200-person software center in Shanghai and in the long run we are expecting to have thousands of software engineers in China,” said Shih in an interview.

The Taiwanese computer maker has seen some good news in the beginning of this year. The sales of its branded notebooks was ranked no.2 in Asia Pacific last quarter with a shipment of 85,000 units. Its Chinese sales saw a 240% increase last year. And earlier this month, the company announced a campaign to re-brand itself in order to reflect the company’s newer focus and direction.

Only time will tell if Shih will be successful in remaking Acer. But if anyone could get the job done, Shih probably could too, and he will probably do it before 2003, the year his self-imposed retirement takes effect. – Thomas Chen, ZDNet Asia