Acer sees 31% profit slump as netbooks lead the way

That sounds like a contradiction, but the PC category selling like hotcakes right now doesn't pull much margin. In fact, it's hard to imagine that the netbook PC category that Acer heavily participates in has any margin at all. These smaller notebooks, which sell for under $350 at retail in most cases, can't give the margins a full-size notebook or desktop PC can.

So, again, sales come before profits. It's the same old story that's been playing in the PC industry for over a decade. But good sales of no-margin netbooks are better than no sales of low-margin notebooks, right?

Acer wants to overtake rival Hewlett-Packard Corp.'s (NASDAQ: HPQ) in netbook sales by 2011. Who knows if the category will be as hot as it is now by then. All indications are that low-cost netbooks are the new notebook for a large majority of consumers who need to get online to do all their stuff, not chug away on a seven-pound notebook monster.

It's estimated that Acer will sell 15 million of its Acer One netbook product in 2009, which is incredible given the state of the U.S. economy and the economy in most developed nations. Yes, all these strapped folks may want these cheap netbooks for now -- but will the trend turn into a paradigm shift all the way into 2011? Perhaps.