PC giant is slashing tabs and PC forecasts as it is forced to take stock.

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Acer now expects its total notebook shipments to slump compared to last year, falling by 10 per cent, as rivalry from tabs, in particular Apple iPad 2 bites, it warned investors today.

Notebook shipments for Q2, Q3 are also predicted to be flat.

Acer’s own Iconia range of tabs launched here earlier this month have yet to make their mark on global tablet market, already inundated with new devices although reviews were positive overall.

This was confirmed by Chairman J T. Wang who also said he expected to ship 2.5 -3 million of the tabs this year.

This is over half the original tab sales forecasts of between 5 – 7 million for the Taiwanese company that recently saw sales slump 20 percent, in spite of being one of the top PC makers globally.

However, the only way is up Acer’s Chair believes.

 “The third quarter will be considerably more stable. The fourth quarter will be even better.”

This follows from announcement earlier this month that the PC giant would “provide channels with US$150 million in sales allowance to clear inventory,” resulting in operating loss of that amount.

And it’s not just the iPad 2 that is crucifying Acer’s bottom line. A recession ravaged Europe, one of its biggest markets, isn’t helping matters either, although it is predicted stabilise in H2, Wang said.

However, Asia Pacific and US markets “remain healthy” he added.

“We expect our inventories in Europe to fall to a normal level by the end of this month and we plan to lower our inventories in the region further in the third quarter.”