Acer seems poised to acquire Dell as the world’s second-largest seller of personal laptop computers, which, if it comes true, will certainly enable Acer to follow only Hewlett-Packard (HP).
No Taiwanese firm has made an achievement so fast and more effectively than Acer. To reach the number 3 spot in the global laptop computers business, Acer went through a corporate reinvention that offers fodder for business-school case studies.
For nearly 15 years, Acer suffered from a split personality. One part of the company built computers for other PC sellers that would then put their labels on the machines. Another part of Acer sold very similar computers under the company’s own brand.
The arrangement created obvious conflicts, Acer executives say, with the group responsible for the Acer-branded products competing against the customers of the manufacturing arm.
In 2000, Acer began cleaving off its manufacturing division. A year later it formed an independent company called Wistron to handle these operations. A smaller, nimbler Acer emerged, outfitted with a new logo and lofty, global aspirations.
With a clean slate, Acer made what looked like counterintuitive decisions. It decided to focus on laptop computers for consumers, and to sell them through partners and retailers, avoiding any kind of direct sales.
This approach placed Acer on a distinctly opposite path from Dell, which was the PC industry’s major success story in 2000. Dell had surged past rivals like Compaq, I.B.M. and H.P. through an ultra-lean direct sales model that hinged to a large degree on shipping desktop computers to big businesses.
In the subsequent years, however, computer retailing shifted in favor of Acer. Consumers now buy more computers than businesses do, and these buyers tend to prefer laptop computers to computer desktops. The advantages that Dell once gained by mixing and matching components for customers at its factories have faded as consumers have flocked to stores to buy preconfigured computers.
Acer’s ascent has accelerated during the global economic slowdown. The company made an aggressive move into the market for netbooks - the small, low-cost laptop computers that have been a rare bright spot during the worst slump the PC industry has ever faced. Dell, which depends far more on PC sales to businesses, has struggled as companies have avoided buying new computers.
Last year, Acer’s market share grew by three percentage points, to 10.9%, while Dell gained just 0.1 percentage point, to 15%, according to the research company IDC. Acer has continued to narrow that gap this year, claiming 11.6% of the market to Dell’s 13.6% through the first quarter.
Acer can keep growing, especially in the United States and China - the two most prized regions for PC sellers. In addition, he’s steering Acer into cellphones, arguing that the growing similarities between smartphones and laptop computers play directly to Acer’s strengths.
In the meantime, Acer has snatched the mantle of quick-moving, lean operator from Dell. Be it wireless technology or super-thin laptop computers with a long battery life, Acer often ships computers with new features before any other large PC maker.
When it spots a hot trend started by another company - netbooks or small laptops, for instance, were the brainchild of Asustek, a fellow Taiwanese company - Acer follows in force, bombarding the market with low-cost in Aspire One Acer mini laptop products.
Read also
[...] The development effort is one of the first experiments by a big-name PC maker in a nascent category of products known as mobile Internet devices, or MIDs, that are designed to fill a perceived gap between mobile phones and laptop computers. [...]
At no time in your fantasy article above did you mention the words “profit” and “margin” . . . . anyone, especially companies making less money than they spend, can talk up market share and units. Acer could not even blink in Dell’s general direction, or HP or IBM. Different model and very different cash (or should I say loss) flows.
Get a calculator.