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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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You have to love this
By Varun on 8/7/2012 4:20:52 PM , Rating: 2
The world's #3 PC maker is calling out Microsoft. In any other world, that would be a bad thing. In this case, we can only pray that the non-stop junk from this company may come to an end.

Everything they make is terrible.

Don't worry though Acer - Microsoft is going to leave the low end of the market for you. That seems to be where you love to live anyway.

If companies like Acer had ever made anything compelling, then MS wouldn't need to make their own tablet.

p.s. Where are you going to go? You can't make an Apple tablet, Android is in THE SAME BOAT with Google making a reference platform, and that leaves you... oh yeah maybe Linux? Good luck with that Acer.




RE: You have to love this
By jnemesh on 8/7/2012 7:31:37 PM , Rating: 2
"Good luck with Linux"? Yeah, guess what people are going to move to when Apple and Microsoft are the "closed" platforms? Linux is a bit rough around the edges, but it has been rapidly improving. It is far less archaic and intimidating to a first time user than it was just 3 or 4 years ago! Add to that the fact that Valve, EA, and other MAJOR game studios are CURRENTLY developing AAA titles for Linux RIGHT NOW. Also add in the fact that hardware manufacturers are LIVID at Microsoft's entrance into the hardware market...and you will see an unprecedented amount of money being thrown at Linux to develop it into a true competitor!

Now, take MILLIONS of frustrated Windows users and try shoving "it's not Metro anymore" down their throats...sit back and watch what happens.


RE: You have to love this
By jnemesh on 8/7/2012 7:37:51 PM , Rating: 2
"Good luck with Linux"? Yeah, guess what people are going to move to when Apple and Microsoft are the "closed" platforms? Linux is a bit rough around the edges, but it has been rapidly improving. It is far less archaic and intimidating to a first time user than it was just 3 or 4 years ago! Add to that the fact that Valve, EA, and other MAJOR game studios are CURRENTLY developing AAA titles for Linux RIGHT NOW. Also add in the fact that hardware manufacturers are LIVID at Microsoft's entrance into the hardware market...and you will see an unprecedented amount of money being thrown at Linux to develop it into a true competitor!

Now, take MILLIONS of frustrated Windows users and try shoving "it's not Metro anymore" down their throats...sit back and watch what happens.


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