UPDATE 1-Taiwan PC firms strong Q3; upbeat on 2010

* Acer Q3 net profit T$3.47 bln vs forecast T$3.4 bln

* Quanta Q3 net profit T$6.1 bln vs forecast T$5.3 bln

* Quanta sees shipments up 40 pct in 2010

* Acer sees netbook PC shipments up 40-50 pct in 2010

* Acer shares up 85 pct this year, Quanta up 76 pct (Adds details, quotes)

TAIPEI, Oct 30 - Taiwan PC giants Acer and Quanta on Friday issued an upbeat outlook for the sector, underscoring the recovery in consumer demand and boding well for peers such as HP and Dell.

Acer and Quanta's results follow better-than-expected earnings from top technology bellwethers such as Microsoft, Intel and IBM, raising hopes for strong sales in the pre-Christmas shopping season and next year.

"It's very clear now that demand is back," Acer Chief Executive Gianfranco Lanci told an investor conference. "We're starting to see replacement activity increasing even from companies."

Acer is the world's No.2 PC brand, lagging HP, while Quanta is the world's largest contract laptop PC maker, supplying the industry's top players including Dell, Lenovo and Toshiba.

Both companies also gave an upbeat outlook for 2010, with Quanta saying it expected unit shipments to climb about 40 percent, and Acer saying it expected netbook PC shipments to climb by a similar number next year.

"Netbook PCs will continue to spearhead mobile PC growth, even though this will be slower than this year," said Lanci. "Now it's very clear that this is additional growth, not cannibalisation."

Acer is the market leader in the low-cost netbook PC segment, a stripped-down laptop PC pioneered by its crosstown rival Asustek in 2007, and is optimised for web surfing and other Internet activities.

Acer also said it saw Google's Android operating system and Chrome web browser as viable alternatives to Microsoft's operating system for web applications, the first major PC vendor to adopt such a stand.

MARKET-BEATING Q3 PROFITS

Acer reported a net profit of T$3.47 billion for the July-September quarter, roughly in line with the street view, while Quanta blew past expectations to record a T$6.1 billion net profit in the third quarter.

However, Acer said revenue in the first quarter of 2010 should fall about 15 percent from the preceding three months, as most consumers and companies pulled back on spending after the peak holiday shopping season.

Both companies said they were confident they would be able to maintain operating profit margins, even as competition intensified as competitors geared up for an uptick in demand in 2010 as the global economy recovered.

Quanta said it expected operating profit margins to remain steady at about 3 percent, while Acer has said previously that it expects to see a similar margin in 2010.

Operating profit margin at Quanta stood at 3.1 percent in the third quarter, and at about 2.8 percent for Acer.

Separately, Acer said in a statement it would appoint Tu Che-min as its new chief financial officer, taking over from Howard Chan, who will become Chairman J.T. Wang's special assistant.

Shares of Acer have risen 85 percent so far this year, beating the roughly 60 percent advance on the benchmark TAIEX share index, while Quanta is up 76 percent this year.