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Company hopes that ultrabooks are the answer to its sales woes

Taiwan's Acer Inc. (TPE:2353) is sick and tired of making "cheap" products.  It lusts for the kind sleek designs that highly profitable American computermaker Apple, Inc. (AAPL) produces.

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. (DELL) and Hewlett-Packard Comp. (HPQ) out of business in 20 years and that 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 HP's "Envy" and Apple's MacBook Air luxury designs back in 2008.  Officially the term "ultrabook" comes from chipmaker Intel Corp. (INTC) 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 Aspire S3-951, 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 $870 USD from, Inc. (AMZN), compared $1,290 USD for the cheapest 13-inch MacBook Air.
Acer Aspire S3-951

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.

Source: WSJ

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RE: Another Brand
By rbuszka on 12/9/2011 1:40:36 PM , Rating: 3
Monster Cable doesn't belong in the same category as Apple and Bose, because they make a very simple product (cable) and focus on deceptive marketing practices to market their product. Apple and Bose are just very effective at marketing the strengths of their products and ignoring their weaknesses, and neither Apple nor Bose have a reputation for making products that break after a few years (aside from the foam surrounds on older Bose cone speaker drivers). Audiophiles know better than to look to Bose for quality sound, but Bose's clientele are not audiophiles. They are average joes looking for a product that makes sound, keeps making sound, provides inoffensive sound quality, and is simple to use. Apple is mostly the same way except that there isn't as great a disconnect between the marketing and the quality product itself.

RE: Another Brand
By Motoman on 12/9/2011 2:44:52 PM , Rating: 1
Neither Apple nor Bose have product "strengths." They have, however, deceived you into thinking they do. And they've managed to make you think they have a reputation for good reliability (they don't).

You're a sucker and you've been taken...hook, line, and sinker.

RE: Another Brand
By name99 on 12/9/2011 7:52:33 PM , Rating: 1
You're a person who wants to buy a motorbike and thinks that someone wanting to buy a car is stupid. Your problem is that you're completely unwilling to accept that other people weigh the qualities of a product differently from how you weigh them.

RE: Another Brand
By Motoman on 12/10/2011 4:58:32 PM , Rating: 2
You're wrong. There are no "qualities" to Apple (or Bose or Monster Cable) products that justify their cost. Only the gullible don't get that.

RE: Another Brand
By melgross on 12/11/2011 6:46:06 PM , Rating: 1
Well, certainly there are no good qualities to your posts. Maybe when you mature, you will stop writing such silly material.

"This is from the It's a science website." -- Rush Limbaugh

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