Analysis: The Impact of the Acer-Gateway Merger
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The biggest question: How is Acer going to handle the presentation of three PC brands to the public?
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Embracing a new gadget indubitably means parting with some hard earned dinero. But eMachines, purchased by Gateway Inc. , is offering next-generation technology at this-generation prices.
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Acer's acquisition of Gateway has had a definite impact on its overall market share, its chairman said Friday, and forecasted the manufacturer would be able to ship 25 percent more computers in 2008.
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(InfoWorld) - Lenovo Group reclaimed the number three spot among PC vendors during the second quarter, pushing rival Acer back into fourth place. But Acer's exceptionally fast growth means the company isÂ likely to overtake LenovoÂ as number three for the entire year, if current trends continue. Acer has been on a roll in recent quarters, grabbing market share and putting pressure on Lenovo. During the first quarter of 2007, Acer tied Lenovo for third place, with both companies reporting shipments of nearly 4 million PCs, giving each company 6.7 percent of the market, according to IDC. Acer, which has made taking the number three spot from Lenovo aÂ principal goal for the year, was able to match Lenovo during the first quarter because of seasonal buying trends in China. Lenovo depends heavily on China, where it has long dominated PC sales. The company's first-quarter sales were slowed by the Chinese New Year holiday, a time when PC sales dive in China. Lenovo saw its first-quarter shipments increase 17.4 percent over the previous year, while Acer's shipments rose 41.4 percent, IDC said. Acer's first quarter sales weren't hit during by Chinese New Year because the company remains a relatively minor player in China, despite having roots in Taiwan, which shares a common language and culture. Acer's presence is much stronger in Taiwan, which also celebrates Chinese New Year. But Taiwan's relatively small population means the holiday had a minor impact on Acer's overall sales during that period. During the second quarter, Lenovo was able to reclaim the number three spot, with a 22.3 percent increase in unit shipments, to almost 4.9 million units, IDC said.Â Acer fell to the number four spot, but showed strong growth during the period. The company's shipments rose 55.4 percent over the same period last year, to almost 4.3 million units -- just 600,000 units fewer than Lenovo. That relatively narrow gap puts Acer within striking distance of Lenovo, assuming current growth trends continue through the rest of the year. Acer did well around the world during the second quarter, with the company posting unit shipment growth of 30 percent or more in every region. The company did particularly well in the Americas, IDC said. "New retail and dealer partner agreements are quickly expanding the company's access to the market, contributing to volume gains," it said. Â
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Digesting Gateway and Packard-Bell Acer has pulled itself off the acquisition trail for the foreseeable future and will spend the next couple of years digesting Gateway and Packard Bell.â¦
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(InfoWorld) - Retail consumers in the U.S. could begin to see great deals on computer purchases as PC vendors get more competitive in the wake ofÂ Acer's announcement on Monday that it plans to buy Gateway. Acer will probably try to reinvigorate the Gateway brand, using spiffier designs and faster processors in an effort to add cachet to Gateway and eMachines labels which are often seen as "bottom dwellers" selling low-cost PCs, said J.P. Gownder, a principal analyst with Forrester Research. In announcing the deal, Acer President Gianfranco Lanci said he planned to preserve Gateway's "powerful and unique brand" in order to cover a variety of consumer market segments, differentiating the two brands over time in an effort to reach a broader variety of consumers. By announcing its plan to concentrate on the U.S. retail market, Acer is signaling that it will not challenge far larger vendors like Hewlett-Packard and Dell for corporate enterprise deals. Acer also said on Monday that it planned to divest Gateway's professional business division, and was already in talks with a potential buyer. That strategy will probably have a far greater impact on Acer's long-time rival Lenovo than on larger vendors, Gownder said. "For HP and Dell, it's going to be two years before this makes an impact on their business," Gownder said. "Lenovo is the company that really loses here, especially if Acer is able to pick up Packard Bell and get a foothold in Europe, as well." On Aug. 7, Lenovo Group announced it had agreed to buy Packard Bell, but that deal appears to be scuttled: part of Monday's news was thatÂ Gateway will exercise its right of first refusal to acquire shares in Packard Bell's parent company. In addition to tripping up its rival Lenovo, Acer will gain valuable retail leverage in the U.S., including Gateway's online retail site and its shelf space in major retailers like Best Buy Co. Inc., Gownder said. Still, Acer faces a large workload in creating a successful merger with Gateway before it begins to reap profits from the move. "Acer has made a smart, imperfect decision. But from what's available to them, it was the best move on the chessboard," Gownder said. Acer now faces pressure to duplicate its success among small business customers and Asian markets in the competitive U.S. retail market, other analysts said. Acquiring Gateway could give it the leverage to succeed, but only if Acer completes a difficult merger, said Charles Smulders, an analyst and managing vice president at Gartner Inc. First, Acer must make sure it retains Gateway's staff in the U.S. channel and retail sectors, while divesting the money-losing professional business, he said. That move would have little effect on Gateway's small stake of the corporate enterprise market, but a larger impact among its government and academic customers. Then, Acer could dedicate its engineers to improving Gateway's image as an economy brand. "The Gateway brand is very well known, but people are unclear what it stands for. So that is one challenge Acer will face," Smulders said. The company will probably try to establish a reputation for using the latest technology, as opposed to marketing Gateway as the brand with the best technical support or the lowest prices, he said. To Acer's advantage, Gateway has been cutting costs for five years already, so that will be a much easier task than HP faced when it bought Compaq, Smulders said. "I certainly think HP will be taking notes, simply because Acer has been gaining ground so fast, particularly outside the U.S. If Acer can pull this off, it would be a serious challenge to HP." HP declined to comment on the possible implications of the deal. "HP does not comment on the business strategies of its competitors," said corporate spokeswoman Emma McCulloch. Â
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Acer's deal to acquire Gateway for $710 million has derailed Lenovo's plans to acquire Packard Bell.
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Last November's buyout by IBM of SOA software provider Cognos is already having a major impact on businesses that use vertical market software. That impact is being felt in the way these businesses warehouse and access their data.
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Acer's planned $710 million acquisitionÂ of U.S. PC vendor GatewayÂ won antitrust approval in the U.S. as the clock struck midnight Monday, Gateway said.
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InfoWorld - The new Gateway will launch a complete line of notebook PCs as one of many steps to revitalize its business afterÂ merging with Acer, an Acer executive said Friday.
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Catching up to Google and Yahoo, Microsoft joins the search-engine business. Also: Hewlett-Packard creates a replacement for semiconductors & hellip;.  Dell makes safer, cleaner PC for the EU & hellip;. and more.
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The $710 million deal gives Acer a leg up in its battle with Lenovo, but important hurdles must be cleared before Gateway will turn around its lagging sales figures.
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(InfoWorld) - People fearing they might miss Gateway's signature black-and-white dairy cow PC boxes after the company is acquired by Acer Inc. have little reason to worry: Acer not only plans to keep the Gateway Inc. brand just the way it is, the Taiwanese company hopes to expand it. "A strong U.S. brand such as Gateway's can be expanded overseas into other markets," said Gianfranco Lanci, president of Acer, in a video feed at the Taipei news conference to announce the deal. Acer's determination to grow the brand should be some relief to American users. Gateway is the fourth biggest PC brand in the U.S., and popular among consumers. But until now, Acer has sold all of its products under its own name. Its strategy going forward is to start using multiple brands in all areas of the world, including the Gateway brand, as well as eMachines and possibly Packard Bell.Â Gateway plans to buy Packard Bell BV, which would ultimately end up as another Acer brand once the Acer-Gateway deal is finalized. Going forward, Acer plans to combine the talents of each company in order to expand product offerings for users. For example, Gateway is strong in desktop monitors, where Acer is weak, so Acer will use some Gateway technology to improve its offerings, said Lanci. The two companies will see where they can share designs and technology to improve their entire desktop and laptop PC line-ups, and expand this product cooperation to Packard Bell if a deal for the company is made. The deal could also mean more PC bargains for users. Becoming larger means Acer can gain better volume discounts when negotiating with parts suppliers. In addition, competition with Hewlett-Packard Co. and Dell Inc. should remain fierce, and the companies all work hard to keep prices low. Acer agreed to buy Gateway in an all-cash deal valued at US$710 million. The two companies combined will become the world's third largest PC vendor by shipments, at around 20 million desktops and laptops a year, and will transform Acer into a multibrand company. The Acer-Gateway deal still faces regulatory and shareholder scrutiny before being finalized. The boards of directors of both companies have already signed off on the agreement. Acer expects to gain $150 million worth of efficiencies via the Gateway deal, in expanding product lines, cross-selling products, cost cutting and in other ways. The Taiwanese company said Gateway employees would be critical to its success in expanding the brand, but did not say whether it would cut staff. Â
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The real issue users need to keep their eyes on is will these three companies be able to leave well enough alone. How other companies have handled past acquisitions might provide some insight into how these company mergers and their products will fare long term.
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Acer plans to buy the U.S. computer maker for $710 million in a deal that will push it past Chinaâs Lenovo Group to become the worldâs third largest PC vendor.
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The Taiwanese PC maker has been growing fast. With Gateway, it gets a bigger foothold on U.S. soil.
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On the surface, the frenzy of telecommunications mergers in the past few weeks raises relatively clear-cut questions for lawmakers and regulators who will be weighing the deals: Will consumers and businesses be harmed if long-distance choices disappear when AT&T and MCI are swallowed by telephone giants SBC and Verizon?