THE ANNOUNCEMENT BY PC manufacturer Acer that it was going to buy Gateway, the United States-based PC vendor, is the clearest indication thus far that it’s no longer willing to sit on the sidelines and play second fiddle to the likes of Dell and HP.<\/p>\n
Acer has already secured itself a strong position in both the international notebook market and the total market in Europe, Middle East and Africa (EMEA). And Acer CEO Gianfranco Lanci, speaking at its global press conference in Spain late last month, said the company is already the number two PC vendor in Europe and the top supplier of notebooks in the EMEA region.<\/p>\n
“We’re seeing growth in the region of 16% at the moment, with notebook sales growing at 30% and with desktops lagging behind at 2% to 3% growth,” Lanci said. “Acer has in the past had a regional bias towards the EMEA region and the addition of Gateway – which is the number three player in the US, behind Dell and HP – will move to correct that imbalance.”<\/p>\n
An additional sweetener for the company is that just before it launched its bid to acquire Gateway, the US company exercised its right to buy PC maker Packard Bell. That will give Acer a stronger presence in Europe as well as moving it from the single brand that it now has to a new position in which it’s able to deliver multiple brands focused on specific segments.<\/p>\n
Lanci said that unlike the HP\/Compaq merger, where the new company moved rapidly to eliminate the Compaq brand, the merged Acer\/Gateway\/Packard Bell would remain a multi-brand company. He explained that as Acer has grown it’s become more difficult to target specific niches, such as the professional market or the gaming market. However, with three different brands on board that will be possible, said Lanci.<\/p>\n
He added that Acer had no intention of integrating the sales and marketing operations of the three companies at this stage but would be looking to use the additional buying power the new entity will provide to drive down its operating costs.<\/p>\n
That’s on top of some of the lowest current operating costs in the market. Lanci said that while the industry had operating expenses in the region of 10%, Acer’s costs were closer to 7% and he believed it would be possible to push those down to 6% or lower.<\/p>\n
Lanci commented that he expected the new organisation to top US$20bn in revenues, up from an expected $13bn this year, once the merger was complete, with the new Acer shipping around 24m units\/year across its product lines.<\/p>\n
Acer Africa MD David Drummond says that while both Packard Bell and Acer have a presence in SA, combining the operations in the local market wouldn’t be logical, as it would mean that some retailers would be buying too high a percentage of their stock from a single vendor. Such retailers would need to find alternative suppliers, cutting the exposure that both Acer and Packard Bell have in the retail sector.<\/p>\n
A large proportion of Acer’s success has been its focus on the notebook market. That’s an area in which it isn’t slacking off but is making an increased effort to push the limits of attractive industrial design.<\/p>\n
Lanci stressed the importance of ensuring that with the consolidation in the industry likely to continue, attractive design would be the deciding factor in customer choices. “The right design and connectivity options are already more important than Gigahertz and Gigabytes,” Lanci said. “While we’ve already seen this in the notebook market, the desktop market is starting to move away from the ugly boxes of the past to more pleasing designs.”<\/p>\n
The idea of making PCs attractive consumer goods has never been more important, as not only are there an increasing number of consumer gadgets available, but the traditional drivers of growth in the PC market seem to be losing their touch.<\/p>\n
Lanci referred specifically to the failure of the new version of Windows (Windows Vista) to drive growth. In fact, he said that Vista has had no impact on growth and that the consensus throughout the industry is that Vista has been a disappointment.<\/p>\n
While corporate PCs will continue to have a conservative image, Acer seems to have grasped the concept that consumers – from entry level up – are looking for computers that not only do the job they’ve been bought for but also look good. Too often PC manufacturers save the great industrial design for the high end of the product range and ignore the entry-level products. Fortunately, it appears that Acer hasn’t fallen into that trap.<\/p>\n