Acer's $710 Million Acquisition Of Gateway Gives Dell A Cow
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Acer acquiring Gateway means that Dell has to look over both shoulders at the same time. On one hand, Dell's past mistakes have allowed a focused Hewlett-Packard to regain market share, become the best friend a channel vendor can have and provide a very competitive set of business computers from laptops (running whichever OS you'd like) to scalable data centers bathed in eco green. And on that other hand, or over the other shoulder if I'm going to continue flogging the analogy, is now Acer. In the United States, Acer was often the largest personal computer vendor you never heard of. Although it did make a few forays into Acer branded products, the Taiwan computer vendor has enjoyed a substantial part of its growth in building computers -- in particular laptops -- for other vendors. The Acer name if far better known outside the United States. Along the way Acer has grown to be neck and neck with Lenovo to claim the No. 3 slot as the world's largest vendor. The Gateway acquisition should put them into a few percentage points ahead of Lenovo. By gaining the Gateway name (as well as the Packard Bell name, by the way), Acer gets to take a strong run at the U.S. market at a time when the market is in flux. Here is the Acer P.R. speak on the $710 million acquisition: "This strategic transaction is an important milestone in Acer's long history," said J.T. Wang, chairman of Acer. "The acquisition of Gateway and its strong brand immediately completes Acer's global footprint, by strengthening our U.S. presence. This will be an excellent addition to Acer's already strong positions in Europe and Asia. Upon acquiring Gateway, we will further solidify our position as No. 3 PC vendor globally." Gianfranco Lanci, president of Acer, added, "Both Acer's and Gateway's geographical presences and product positioning are highly complementary. We believe that our combined scale will lead to significant efficiencies. Gateway has built one of the industry's most powerful and unique brands and with this acquisition, we will have the opportunity to implement an effective multi-brand strategy and cover all the major market segments. In time, we intend to actively manage our brand portfolio and differentiate our brands to address different consumer segments. We are also acquiring a world-class team and Gateway's employees will be critical to our combined success." " So now you have Hewlett-Packard, Dell, Lenovo and Acer as the main contenders in the PC business both worldwide and in the United States. Does anyone really need to see how important a global footprint has become for success in selling computers and laptops? The Acer acquisition is good news for computer buyers in the United States. They will now have one more company that is substantial, embraces innovation and understands the channel to consider when they are purchasing new systems. I haven't forgotten Apple, which continues to be my recommendation for someone wanting to buy a laptop that costs a few more dollars on the front end, but will save you a lot of help desk calls on the back end. Gateway in its prime was a fresh breeze (although with its cow spot motif, I suppose fresh breeze is the wrong term). The company emphasized its mid-America values and its pony-tailed founder Ted Waite was both a media star with his cow-themed commercials and provided a human touch to a world of bits and bytes, speeds and feeds marketing. Dell has some serious shoulder swiveling to do in order to stay ahead of this bunch. Update: here is the status on Packard Bell Update: I did a blog on the U.S. tech industry getting caught in the squeeze between China and India. |
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Comments (5)
I own a Gateway Lab top and I was looking at Acer when I bought my PC. I chose Gatway because of its great componets. But it lacked some of the function that Acer offered. To get to the point, I am glad to see this buy out and I am interested in how I can get some of Acer's functionality into my PC.
Such as:
A S-video port, A RCA audio port @ line level and coax connection to a tuner card.
This will make my lap top a true media station.
Any help with this is appreciated - Jerry Bisio
Posted by Gerald Bisio | August 28, 2007 12:11 PM
This is the time to see which company will stand and which will fall. HP, Acer, and Dell, give out great systems time after time. But each of them have their own flaws. HP is a company who never get their customer service right as it got to be the worst customer service company realted to IT. Acre may have purchased Gateway, but Gateway doesn't have the greatest reputation as a PC competitor, sliding from bankrupcy at one time. Dell, well, needs to get their internal issues sorted out first before getting into the fight.
But overall, I think if we compared who would be the successful PC competitor over time, I think it is Dell. Dell has some issues in the past regarding battery explosions, firing of Kevin Rollins, and entering of Michael Dell, and the internal investigations with the SEC, the products have been fantastic, which is more than I can say about HP. Servers from Dell have been phenomenal, hands down. But remember that HP is not done with their own internal investigation regarding the phone tapping episode. So it may take time, but Dell with its deal with Walmart and walking into the channel phase, may be making the change it needs. Take care.
Posted by Nick Jeffers | August 29, 2007 2:00 AM
Former Gateway Senior Vice President rips current & past management over company death spiral.
http://pcpitstop.com/news/rob/rcheng0709.asp
Posted by Rick Gassko | August 30, 2007 5:04 PM
Sorry, the leaders of the market need to stop looking over their shoulders and instead focus on what builds a great company- your internals and your product.
No argument Dell has lowered quality, Acer has been questionable since the early days...Gateway albeit has put out a better product as of late (in exchange for some features), HP as well. But there is so much room quality wise between them and the macs of the world.
Why cant they look past the tempting low-buck offering and keep focused on quality? Even if you have to pull a Gateway move and lose some of the features for best-of-breed components, thats the way to go. My hat is off to Gateway for their effort- which didnt go unnoticed by Acer. Acer bought Gateway at the best time, it is building market share by bringing back quality.
Now, if they(Acer) will just leave it alone on its present course, Dell/HP will trip looking over their shoulders to the competitors that are suddenly next to them instead of trailing behind.
Posted by Jeff S | August 31, 2007 2:40 PM
I have been searching for a new laptop for approximately six months. The new laptop will definitely be a tablet PC, and it will be either from HP or Gateway. I agree with Jeff's point about Gateway's recent brought-back quality of the consumer laptop. Since if I have enought budget, I will definitely go for Gateway's newest tablet PC model. I hope the new Acer/Gateway will continue on making the great models. On the other hand, recently I just bought three low-end laptop computers from Acer for my family members. They were priced at $399.99 in BestBuy. The computers have almost everything except a built-in bluetooth adaptor and a camera. The system memory is pretty small (512 MB for Windows Vista Home Basics), and a low power speaker (I guesse it is only 2 W). It can read and write double-layered DVDs, TV-output, 5-in-1 media reader, 3 USB ports, 1 PC card slot, 10/100M network, dial-up modem, and no firewire) After additions of more system memory (1 GB has a 84% of regular system load, and 2 GB has a 43% system load), I have no issues with them and they are working fast, smoothly, and perfectly. I checked on Acer website, and the case I have is exactly the same for their high-end models - beautiful and shiny. So I guess at the time Acer announced for its plan of production of low-end computers for the poorer region, they also figured out a way to lower their costs to make high-end computers. I am just hoping we consumers will always pay less or reasonable price and still enjoy our products and services.
Posted by S-E Chen | September 9, 2007 11:25 PM