Acer expects 10 to 15 percent drop in notebook sales -

Acer issued a rather worrying forecast this week, as the fourth largest PC vendor announced it expects notebook sales to drop 10 to 15 percent in the first quarter of 2013.

The company attributed the downturn to seasonal factors, but it could be a sign that notebook vendors are in more trouble than ever. Windows 8 failed to boost sales, demand for Ultrabooks remains sluggish and next generation hybrids aimed to take on tablets have yet to materialise.

Meanwhile, tablets are doing great and they are expected to overtake notebooks in terms of unit sales this quarter.

Acer CEO Wang Jeng-tang said that the massive sequential decline is also a result of "replacement demand" for new products, such as smartphones and tablets, as well as some Windows 8 gear. Speaking at the sidelines of a corporate event, Wang told reporters that the notebook market had been turbulent over the past two years, reports the Taipei Times

Apple is still doing rather well, but Windows vendors are hurting.

Lenovo posted great financials a few weeks ago, but much of its growth was attributed to strong phone and tablet sales in China. However, Wang still sees some light at the end of the tunnel. He pointed out that Microsoft continues to promote its new OS and its Surface tablets, so demand for Windows 8 PCs could receive a boost. Since both the Surface Pro and Surface RT threaten to flop, Wang's predictions sound a tad optimistic.

What's more, Wang believes the tablet market will continue to be the main driver of Acer's sales growth in 2013. Although any growth is welcome at this point, most of Acer's tablets are affordable, Android based designs and Wang went on to say that the new Iconia B1 tablet generated huge sales last month.

However, the B1 is an entry level 7-inch tablet and it sells at a fraction of the cost of an Ultrabook. Acer plans to ship a total of 5 million tablets this year, up from 1.8 million last year. Up to 20 percent will be cheap 7-inchers. Acer also plans to ship two million smartphones this year, up from 500,000 last year.

It doesn't sound like much and it isn't. Like most traditional PC vendors, Acer failed to cash in on the mobile boom. Lenovo and Asus bucked the trend, at least to some extent, but PC giants like Acer, Dell and HP missed the boat.

Taiwanese OEMs are trying to diversify, slowly making inroads in the server space and they are still pushing tablets and tablets. However, growth in these segments is unlikely to offset the effects of the PC slump, at least in the short term.