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Unable to compete, OEM bemoans Microsoft decision to step up

Like King Theoden of The Lord of the Rings, Microsoft Corp. (MSFT), old and gray, watched as Apple, Inc.’s (AAPL) tablets, which were increasingly cannibalizing users' screen time, imperiled its kingdom.  Like the king, Microsoft's advisors whispered false promises of security.  Any day now a successful Windows tablet would come out...

Except it didn't.  So Microsoft, at last awoken, took up the sword unveiling the Surface -- a slick Windows 8 tablet that shocked the tech world.

Now its finding that some of its former allies have taken its awakening quite badly.  Among those is Acer, Inc. (TPE:2353).

Acer played the role of Wormtongue to Microsoft's Theoden, ever lofting big promises in the tablet space, and ever falling behind Apple misstep by misstep.  Now the company hisses at its former ally for taking matters into its own hands.

Comments JT Wang, chairman and chief executive of Acer, in an interview with The Financial Times, "We have said [to Microsoft] think it over.  Think twice. It will create a huge negative impact for the ecosystem and other brands may take a negative reaction. It is not something you are good at so please think twice."

Campbell Kan, Acer’s president for personal computer global operations, adds a not-so-subtle threat, suggesting, "If Microsoft … is going to do hardware business, what should we do? Should we still rely on Microsoft, or should we find other alternatives?"

Microsoft in regulatory filings has acknowledged that its OEMs may be hurt by Surface.  But the key thing to note is that the whole reason that Microsoft entered this face was because its partners failed, miserably, to compete against Apple.



Acer's sour grapes are perhaps a testament to the overall weakness of its tablet line.  J.T. Wang in Dec. 2011 called his company's product's "cheap" and "unprofitable".  Samsung Electronics Comp., Ltd. (KSC:005930) and others have outsold Acer in the emerging Android tablet market.

Even if Microsoft's Surface proves successful, volumes will likely remain relatively low, by Microsoft's own accounting.  Thus companies like Samsung who have promising Windows 8 tablet products should be fine.  

For companies like Acer, who lack viable tablet product of any flavor, there will likely be much bellyaching.  But at the end of the day they forced Microsoft to make this decision in the first place, and if they focused on creating viable products rather than making hollow threats, then they would have far less to worry about.

Source: Financial Times



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competition
By Nortel on 8/7/2012 2:26:10 PM , Rating: 2
This is the same as Google owning Motorola and at the same time providing the OS to Samsung, HTC, Sony, etc...

Acer's ONLY choices are to keep producing Android tablets or start pumping out Windows tablets. Yes, it will be a hell of a struggle to compete in the hardware space when Microsoft can spend almost unlimited funds in advertising and it leaves Acer to pick up the scraps. At the end of the day its Android vs Microsoft vs Apple and Apple has it's $hit on lockdown. If MS is capitalizing on their flavor of tablet then you can see what kind of 'the rest' will be out there running Android.




RE: competition
By encia on 8/8/2012 11:09:31 AM , Rating: 2
Acer Iconia W500 says Hi. As a tablet OS, Windows 7 is not competitive against Android 4.x.

I have since installed Android-x86 4.0 RC2 on my Acer Iconia W500.


"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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