Acer Sick of Being "Cheap" and "Unprofitable", Wants to be Like Apple
December 8, 2011 3:44 PM
comment(s) - last by
Company hopes that ultrabooks are the answer to its sales woes
Taiwan's Acer Inc. (
) is sick and tired of making "cheap" products. It lusts for the kind sleek designs that highly profitable American computermaker Apple, Inc. (
Acer CEO J.T. Wang was blunt when he remarked, "We will shift our strategy to improving profitability from pursuing market share blindly with cheap and unprofitable products."
The candid rhetoric is a sharp departure from that of company founder Stan Shih who in 2010 fielded such wild opinions as stating that Acer's products were so cheap they would put Dell, Inc. (
) and Hewlett-Packard Comp. (
out of business in 20 years
Apple was a "mutant virus"
that would go the way of "Betamax". At the time Acer had just
stolen the number two spot
in global sales from Dell.
However, since then it's been all downhill for the firm. It began to post losses, its
CEO was forced to resign
, and suddenly "cheap" was perceived in a whole new light. Suddenly Acer began to
aspire to be more like Apple
-- a premium vendor with large margins.
In 2011, the situation has progressively deteriorated for Acer, despite its change in attitude. Tablet sales
passed netbook sales
-- Acer's traditional sales driver. Acer had prepared for this
launching an Android tablet
, but this first crack at the tablet market proved a relative flop, forcing it to
cut sales estimates almost in half
Recent estimates on global PC sales show Acer shedding nearly 20 percent of its U.S. and 10 percent of its global market share,
falling to fifth place in the U.S.
and fourth place globally in PC sales (excluding tablets).
Acer feels that by focusing on good battery life, a thin design, and light weight it will be able to return to sales success. The culmination of all those characteristics is "ultrabook" a class of PCs first introduced by
Apple's MacBook Air
luxury designs back in 2008. Officially
the term "ultrabook" comes from
chipmaker Intel Corp. (
) and has a strict set of hardware quality requirements for use.
Mr. Wang comments, "Selling more ultrabooks will also help improve our profit margins as they command higher prices."
Acer's first ultrabook, the
, went on sale on Oct. 10, 2011. The 13-inch design is remarkably similar in look to the MacBook Air, complete with a thin metal shell case. It's currently retailing for as low as
from Amazon.com, Inc. (
for the cheapest 13-inch MacBook Air.
If all goes according to plan, Acer hopes to halt the losses and grow 10 percent in 2012. But to do that, it argues, it must stop selling "cheap" junk.
This article is over a month old, voting and posting comments is disabled
RE: Another Brand
12/8/2011 6:36:24 PM
I'm not sure about this, look at how bad Apple's reputation was before they came back making premium products. I for one, think Acer has a nice kick to it's name. I think if they dramatically revamped their lineup, it's possible they could re-design their brand name. Many companies have done this. Look at Sprint, as little as three years ago, they were looked at as the worst mobile company in the U.S. and now they three years later, they've been taunting Verizon's customer service daily and with a new network in the works, it looks liek their brand is becoming a higher value. Not impossible.
RE: Another Brand
12/9/2011 1:33:23 PM
The problem is that the corporate culture at Acer is wildly different from Apple and is more like the mundane PC makers like HP and Dell. You don't have a person at the top making design decisions and pouring his personal passion into every decision. Instead you've got a bunch of MBAs with no knowledge of the customer's desires (because that's for the little people to focus on), and they only focus on profitability through volume and cost-cutting, so you've got a recipe for falling deeper into unfocused confusion and a race to the bottom of the quality totem pole, not a more coherent brand. To build a high-end brand, you can't cheapen it one iota with 'low-end' products. If the customer's brand recognition of Acer isn't focused on high-end products, they will look for a brand with a more visible high-end focus (like Apple).
Sadly, I see Apple going this route more and more already as Steve Jobs has been gone, because he had passion and leadership abilities. I don't think Tim Cook will be able to lead as effectively as Steve Jobs, and while he may have passion and design sense, he won't have the 'my way or the highway' attitude that Steve brought to his management style, and his input will eventually be overwhelmed by the cacaphony of MBAs and gradually silenced, rather than being the dominant voice. I honestly believe the iPhone 4S will be the last 'insanely great' Apple product, and the company will gradually squander its reputation on increasingly mediocre products until the company eventually fails. At the first sign of a downward trend in Apple stock, sell your shares. It will be a race to get out.
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
Tablet Shipments Outpace Netbook Shipments in Q2 2011
October 25, 2011, 9:24 AM
Lenovo Airs First Ultrabook W/ Dedicated GPU, Acer Clones MacBook Air
September 4, 2011, 3:00 PM
Intel Shows Off Ultrabook BOM to Prove Machines Can be Built, Sold for Under $1K
August 8, 2011, 1:54 PM
Analysts: Apple Now Has More Than 10 Percent of the U.S. PC Market
July 14, 2011, 1:52 PM
Acer Slashes Year-End Tablet Shipment Target by 60 Percent
June 15, 2011, 10:15 AM
Smart Security Cameras: 5 Good Choices For Any Budget
July 25, 2016, 7:13 PM
Top 5 Smart Watches
July 21, 2016, 11:48 PM
Retiree Sues Apple For $7,500 for Wiping Honeymoon Photos From His iPhone
November 30, 2015, 10:23 AM
iPhone 7 May Pack 3-4 GB Memory, More Storage; 4-Inch Comeback is Rumored
November 20, 2015, 10:12 PM
OnePlus One, OnePlus 2 Will Receive Android Marshmallow in Q1 2016
November 16, 2015, 9:58 AM
Lenovo Whoa: Motorola Droid MAXX 2 and Turbo 2 Break Cover in Leaks
October 26, 2015, 3:12 PM
Most Popular Articles
Say Goodbye to Data Plans - Sprint and T-Mobile offer Unlimited Data
August 22, 2016, 6:12 AM
Uber - Everyone's Autonomous Car Driver?
August 20, 2016, 6:01 AM
Lenovo vs. Asus vs. HP - Best Laptop Under $500.00
August 19, 2016, 4:00 AM
2 NEW PlayStation 4 Models - Unveiling September 7th
August 23, 2016, 6:23 AM
Get Ready to wait in line – iPhone 7 due September.
August 18, 2016, 7:15 AM
Latest Blog Posts
Coming Soon - Drones and Airports
Aug 24, 2016, 12:40 PM
SolarCity’s Gigafactory: A Milesone in Emerging Technology by Lily Emamian - 15 August 2016
Aug 15, 2016, 6:30 AM
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information