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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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RE: Aaaha
By dgingerich on 8/7/2012 3:40:18 PM , Rating: 2
Acer used to make decent systems, back in the 486 days. Once the Pentiums came out, their reliability dropped like a rock.

they used to make great monitors, too. I had an Acer 34T 14" monitor for over 8 years before I upgraded to a 19", followed within two years by my first LCD. That 34T is still the monitor that I owned the longest. It had a beautiful screen for the time. Even the 19" that I replaced it with didn't have as nice of a screen. It wasn't until I got my current 27" HP (2560X1440) that I got the pixels and small and sharp as those.

It's really too bad that Acer has gone downhill so hard. They're just makers of cheap garbage these days.

RE: Aaaha
By geddarkstorm on 8/7/2012 5:32:21 PM , Rating: 3
I grew up on an Acer with a 75 MHz Pentium processor and Windows 95/98SE. It originally came with this Acer UI running ontop of Windows 95, it was... weird but kinda interesting, useful if the computer had been a tablet, maybe. It put things in categorical areas with GIGANTIC buttons. But then we upgraded to 98 SE when it came out.

BSODs were a regular part of computer use back then. Amazing how things have changed.

RE: Aaaha
By Motoman on 8/7/2012 7:11:16 PM , Rating: 3
Sony had a similar thing back in the Windows 95 days...they called it "VAIO."

You had this goofy little screen that had big, huge icons to click on, meant to be used by people who were befuddled by digital watches.

Reminds me of Metro...

RE: Aaaha
By Gunbuster on 8/8/2012 11:43:24 AM , Rating: 2
I worked at Best Buy back in the day at a service center. I used to super glue cpu heatsinks to the meager bent sheet metal one Acer put on the VRM to stop them from blue screening.

“And I don't know why [Apple is] acting like it’s superior. I don't even get it. What are they trying to say?” -- Bill Gates on the Mac ads

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