Acer Weaknesses

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  • Published : January 26, 2010
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Acer closes in on Dell's No. 2 PC ranking
By Bruce Einhorn, BusinessWeek
Tuesday, January 20, 2009 11:33 AM

Just a few years ago there was a clear pecking order in the PC industry, with Dell at the front and Acer way back in the queue. Dell and its U.S. rival Hewlett-Packard were the clear champions, selling far more desktops and laptops than anyone else. Meanwhile, little Acer, a Taiwanese company that had tried and failed in the 1990s to crack the U.S. market, was an also-ran, with worldwide market share in the single digits. As recently as 2003, Acer ranked just seventh in sales around the world.

Lately, though, the Taiwanese have been pushing their way ever closer to the front of the line. Market-share numbers published on Jan. 14 by research firm International Data show HP is still on top, with 19.6 percent of all PC shipments, and Dell is No. 2. But Michael Dell has reason to worry. While Dell shipments fell 6.3 percent in the fourth quarter, Acer's jumped 25.3 percent. That not only puts the Taiwanese company solidly in the No. 3 position worldwide, it puts Acer less than two percentage points away from Dell, with 11.8 percent share to Dell's 13.7 percent. And Acer is likely to keep on closing the gap, say analysts. "In the next two or three quarters, you will probably see Acer surpass Dell," predicts Daniel Chang, an analyst in Taipei with Macquarie.

Gateway Was an Opening

What accounts for Acer's rise? The company is benefiting from its US$710 million purchase of Gateway, announced in August 2007. At the time of the deal, Gateway was the third-biggest PC brand in the United States, and the purchase has helped Acer gain ground in a market that had long stymied the Taiwanese company. Shortly after that deal, Acer followed up with the acquisition of the Packard-Bell brand, popular in parts of Europe. According to the latest IDC numbers, Acer now ranks third in the United States, with shipments of 2 million computers in the fourth quarter....
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