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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: The problem...
By TakinYourPoints on 12/9/2011 5:54:51 PM , Rating: 3
Or PC makers can actually put money into good displays, trackpads, keyboards, in a slim chassis with excellent battery life.

There are legit reasons why people buy Apple laptops, and there are legit reasons why PC laptops that try and compete in terms of physical build quality and ergonomics cost as much as or more than a comparable Mac.

The idea that there are no real advantages to Apple's hardware is ridiculous. This mindset also puts a ceiling on the level of quality in non-Mac notebooks. I think it is ridiculous that so much PC hardware is garbage when it doesn't need to be. The problem is that people won't pay up for quality, and if they do it's on a Mac.

Some good PC company like Lenovo has a real opportunity, they just need to really advertise good components, no pre-installed bloatware, etc etc.

RE: The problem...
By Motoman on 12/10/2011 5:04:05 PM , Rating: 2
There are legit reasons why people buy Apple laptops

No there aren't. The internet is littered with how craptastic Apple products are. There's nothing legitimate about them, and for people like you (and Tony Swash, et al) to keep pretending that there is does nothing but underline the fundamental irrationality of the Apple consumer.

RE: The problem...
By melgross on 12/11/2011 6:48:55 PM , Rating: 2
You are a sad person. I imagine you always buy the cheapest junk you can find, and come up with excuses as to why it's better. I bet no one ever believes you.

RE: The problem...
By TakinYourPoints on 12/11/2011 7:17:40 PM , Rating: 2
I imagine you always buy the cheapest junk you can find, and come up with excuses as to why it's better.

You see this kind of reasoning so often. It's like people pumping up the Nook Color because it is cheap, while they ignore the fact that it is really slow and poorly made. But herp derp, doesn't matter because it is dirt cheap, it can be rooted (running a crap OS on crap hardware, oh joy), and it doesn't have a fruit shaped logo on it.

Fanboys, gotta love them.

RE: The problem...
By Motoman on 12/11/2011 10:27:25 PM , Rating: 2
You are a sad person. I imagine you always buy the most expensive junk you can find, and come up with excuses as to why it's better. I bet no one ever believes you.

Costlier != better.

Too bad you can't figure that out. Enjoy your Apple, Bose, and Monster Cable products.

RE: The problem...
By TakinYourPoints on 12/11/2011 7:13:49 PM , Rating: 2
The advantages are easily quantified. The only other laptops I would consider are mid and high end Lenovos for very similar reasons.

Your arguments are based on rhetoric and emotion, not logic or objective reasoning. But please, continue to shill for cheap and poorly made products. I have zero issue with low-end hardware btw, I understand that not everyone can afford something that is well made with good components, but to say that they are somehow superior is ridiculous.

RE: The problem...
By Motoman on 12/11/2011 10:26:17 PM , Rating: 2

Acers may be cheaper than other products...but they're not poorly made.

And that doesn't make it low-end hardware either...specs are specs. At the time, other comparable models were generally a couple hundred dollars more at a minimum. Makes no difference which one you buy - they all perform essentially the same.

And there are plenty of examples of really expensive products being worse than inexpensive ones. Bose for example. Pretty much anything is superior to Bose, at darn near any price point. There's a reason Bose prohibits actual audiophile publications from reviewing their products...

RE: The problem...
By TakinYourPoints on 12/12/2011 1:09:47 AM , Rating: 2
Just because Bose makes a poor but overpriced product, it doesn't automatically mean that all premium products are automatically garbage as well. Really poor argument you have there.

And yes, Acer is trash. Trash displays, trash keyboards, trash trackpad, trash build quality, and trash customer service. Sorry bro.

"We don't know how to make a $500 computer that's not a piece of junk." -- Apple CEO Steve Jobs

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