Taiwan's Acer to buy Gateway, foils Lenovo
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TAIPEI/SHANGHAI  - Taiwan's Acer  will buy Gateway  for $710 million, creating the world's No. 3 PC maker and doubling its U.S. presence while dealing a blow to arch-foe Lenovo's  efforts to grow in Europe.
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TAIPEI, Taiwan - Taiwan personal computer vendor Acer Inc. expects its computer shipments to increase 30-40 percent this year, a reduction from previous sales forecasts.
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(InfoWorld) - Just two weeks after expanding its relationship with Best Buy, Lenovo GroupÂ said Wednesday it will try to win even more U.S. small business customers by selling its notebook PCs at Circuit City's retail shops. In both deals, customers will be able to buy Lenovo's ThinkPad T60 widescreen and Lenovo N100 notebook PCs. Circuit City will also sell extra variations of those models in its stores, and the C200 notebook over its Web site and the phone. The move makes Lenovo notebooks available to shoppers at Circuit City's 700 U.S. stores and Best Buy's 300 "Best Buy for Business" stores. The deal could reach even more consumers in 2008, when Best Buy plans to build 95 new stores in the U.S. Lenovo made the move because it sees a trend of more small business users purchasing their PCs at retail outlets instead of channels or online, according to a statement from Steve Mungall, Lenovo's vice president for worldwide and Americas channels. If it succeeds, the plan could help Lenovo return to profit after several weak quarters. The company relies strongly on revenue from China and Europe, while sales in the Americas have declined with a slump in enterprise demand. The company was also shaken earlier this month byÂ the sale of 300 million Lenovo shares by IBM, its second-biggest shareholder and the original owner of Lenovo's ThinkPad PC line. However, while Lenovo is making a wise move in using retail stores to reach small business buyers, it will face new challenges, one analyst said. Because retail stores attract a full spectrum of buyers, Lenovo must improve its marketing and product features to succeed. "Retail is a blunt sword to capture those customers as opposed to the sharp edge they are normally used to. Being in stores like Best Buy, Circuit City, and Office Depot means they need to be priced competitively against the more consumer-focused offerings on the shelf," said Stephen Baker, vice president of industry analysis for the NPD Group. To succeed with this strategy, Lenovo will have to sell PCs designed for both consumers and small businesses instead of the business-focused notebooks they have now. "Bottom line is they are entering a very tough segment with products that are trying to focus narrowly in a wide atmosphere. I suspect that they will be severely challenged to profitably expand their business to the customers they are interested in with this channel strategy," Baker said. In the meantime, Lenovo is sticking with its business focus. The company advertises the T60, with a weight of 5.1 pounds (2.3 kilograms),Â as the lightest 15.4-inch widescreen notebook available from the top five vendors. And Lenovo pitches the N100 to small business customers who want improved Wi-Fi for greater range and faster speeds in wireless connectivity. For Circuit City sales, both models come preloaded with Microsoft's Windows Vista Home Basic or Premium OS, while the online version of the T60 uses Vista Business. Â
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A fast growth rate and recent acquisitions in the U.S. and Europe will extend Acer&#39;s lead over Lenovo Group as the world&#39;s third-largest PC vendor behind Hewlett-Packard&#160;and Dell, according to a study released by Gartner on Wednesday.Acer and Lenovo stood neck-and-neck in global PC shipments with 8.1 percent and 8 percent market shares, respectively, in the third quarter of 2007. Before acquisitions, Acer shipped 5.54 million PC units worldwide, a healthy 58 percent year-over-year increase. The growth rate overshadowed Lenovo, which shipped 5.48 million PCs, a 22.8 percent increase.Gartner&#39;s quarterly figures were compiled before&#160;Acer finished its acquisition of Gateway&#160;on Wednesday for $710 million. Acer also funded Gateway&#39;s proposed acquisition of European PC vendor Packard Bell&#160;for an undisclosed sum. That was&#160;a blow to Lenovo Group, which in early August revealed it was in discussions with Packard Bell over a possible acquisition.Packard Bell is largely a European vendor and has a small market share, similar to eMachines in the U.S before it was acquired by Gateway, said Diana Maranon, managing partner at Averil Capital Markets Groups. Maranon&#39;s company brokered Gateway&#39;s Packard Bell acquisition.An IDC report, also released Wednesday, listed Lenovo as the world&#39;s third-largest PC vendor but indicated&#160;Acer could overtake Lenovo&#160;with its growth rates in the Europe, Middle East, and Africa and Asia-Pacific markets, excluding Japan. Acer&#39;s U.S. PC shipments grew more than 100 percent during the third quarter, though it could face more pressure from competitors as it continues to expand, IDC said.In the U.S., Acer replicated the business strategy that made it highly successful in Europe: de-emphasize retail, sell through indirect channels, and offer low, competitive prices, said Roger Kay, founder and president of Endpoint Technologies Associates. Acer stands at the low end in the U.S. market, and the Gateway acquisition gives it a good position in the middle and high-end markets, Kay said.Gateway&#39;s worldwide shipments increased 8 percent in the third quarter, though U.S. shipments fell 14.4 year over year, Gartner said.Acer&#39;s global growth strategy is paying dividends and could affect Lenovo in the U.S. and Europe, Kay said.The Packard Bell acquisition was a defensive move for Acer to ensure Lenovo doesn&#39;t get a toehold in the European market, Kay said. Acer is already one of the top notebook sellers in Europe.Lenovo showed positive growth in global markets, but Acer&#39;s acquisitions block Lenovo from acquiring some valuable shelf space for product distribution, said Charles Smulders, managing vice president at Gartner, in an e-mail interview.Lenovo could not be reached for comment.Global PC shipments&#160;during the third quarter were 68.4 million, driven by high demand for laptops in the home market, Gartner said. HP was the world&#39;s top PC vendor, with 12.8 million units shipped, a 18.8 percent market share, and 33.1 percent year-over-year volume growth. Dell followed with a 14.4 percent market share, shipping 9.86 million units, a 3.5 percent increase.The survey includes desktop PCs, laptops, and x86 servers.
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Shares in Lenovo (0992.HK), the  world&#39;s third largest PC maker, slid more than 2 percent after  news that U.S. rival Gateway  will try to block the  Chinese firm&#39;s effort to buy European-focused Packard Bell.
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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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(InfoWorld) - YahooÂ reached a deal for prime real estate on all Acer PCs shipped globally, with a co-branded toolbar, homepage, and search engine, the companies said Wednesday. In a deal that extends the battle for the PC among Internet companies, Acer laptops and desktops shipped from Oct. 1 will direct users to an Acer-Yahoo homepage when they click on a Web browser, complete with Yahoo portal content such as the Yahoo search engine, news, music, sports and the Yahoo Personal Assistant. The pact mirrors anÂ agreement between Dell and GoogleÂ earlier this year, and ups the ante with MicrosoftÂ and other companies battling to drive PC users to their Internet-based services. The PC desktop has become a battleground for companies fighting to increase their brand awareness and Internet ad revenue. The comingÂ launch of Windows VistaÂ highlights the issue because Microsoft is moving toward putting more and more Internet capabilities, such as search, on its OS, which would make it the first item users see when they boot up their computer. In May, Dell agreed to install Google homepage and search tools on all desktops and notebooks shipped to consumers and small and medium-size businesses worldwide, effectively kicking Microsoft out of a position it has occupied for years. The Yahoo, Acer deal does essentially the same thing, and while Acer isn't nearly the size of Dell, it is the fastest growing PC vendor among the top 10, and is based in Asia, the fastest growing PC market in the world, according to market researcher IDC. Yahoo and Acer referred to the agreement as a multi-year deal, but did not specify how many years, nor whether it would involve any kind of revenue sharing. Acer will factory-install the co-branded toolbars and homepages on all of its desktops and laptops, the companies said. Once Microsoft launches Internet Explorer 7, Acer will set Yahoo as the default search engine for IE7 on all of its computers. Neither Yahoo nor Acer representatives were immediately available for comment.ADVERTISEMENTMAKE SOA REAL WITH IBM WEBSPHERE PODCASTStreamline processes and maximize efficiency within a proven service oriented architecture. Take back control of your business processes with IBM WebSphere.
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TAIPEI/SHANGHAI  - Taiwan's Acer Inc will buy  Gateway Inc for $710 million to double its U.S. presence and  unseat China's Lenovo as the world's No. 3 PC maker, while  dealing a blow to its efforts to grow in Europe.
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Acer, the world&#39;s third largest PC vendor, is taking aim at Japan this year as a key place to grow its booming business, the company chairman said.The Taiwanese company plans to extend its business model of working closely with, and sharing profits with, distributors, to Japan, where companies such as Sony and Toshiba dominate the market, Acer Chairman J.T. Wang told local media in Taipei. An Acer representative confirmed the statements.Acer also plans to release new products in the second or third quarter of this year aimed at ultra-mobility and the low-cost segment of the PC market, Wang said.The Acer representative declined to provide further details on what kind of devices the company may launch, but local media in Taiwan speculate that Acer is planning an ultra-low cost laptop PC to compete against&#160;Asustek Computer&#39;s Eee PC laptop.Asustek created the Eee PC to sell in emerging markets such as China and India. It carries an Intel Celeron processor, weighs less than a kilogram, has a 7-inch LCD (liquid crystal display) and can connect to the Internet wirelessly. The lowest-priced version costs NT$7,999 (US$248).The Eee PC has garnered so much attention for Asustek, which forecast it will sell 3.8 million of the devices this year, that many of its fellow Taiwanese&#160;competitors are developing rival devices. Taiwan&#39;s Micro-Star International&#160;(MSI) has said it&#39;s working on an ultra-low cost notebook&#160;that will use an extremely low voltage, low-cost microprocessor from Intel called Diamondville. Intel has said it will formally unveil the new chip at the Intel Developer Forum in Shanghai this April.Acer also believes its&#160;first quarter sales will be far better than last year, despite global economic worries. Wang told local media that Acer&#39;s sales will rise 15 percent to 20 percent year-on-year in the first quarter, which ends March 31.&#160;
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TAIPEI, Taiwan -- Acer Inc. plans to acquire U.S. computer maker Gateway Inc. for $710 million in a deal that will push the Taiwanese company past China's Lenovo Group as the world's third largest vendor of personal computers.
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Despite the announcement that Gateway will acquire Packard Bell, Chinese computer manufacturer Lenovo said Tuesday that it will not completely give up on attempts to acquire the company itself.
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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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Acer's planned purchase of Gateway Inc. for $710 million, announced on Monday, means another reordering of the PC marketplace, analysts said.
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Shares in Lenovo , the world's third largest PC maker, slid more than 2 percent after news that U.S. rival Gateway  will try to block the Chinese firm's effort to buy European-focused Packard Bell.
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(InfoWorld) - Acer Inc. executed a master stroke in the global war for PC market share withÂ its US$710 million purchase of Gateway Inc., but it may take a while for the market to see the light. Industry researchers view the deal as a long term positive, saying it not only strengthens Acer's ability to challenge Hewlett-Packard Co. and Dell Inc. for U.S. market share, but that it alsoÂ blocked a potent rival, Lenovo Group Ltd., from gaining ground in Europe. Even Sun-tzu, the ancient Chinese war strategist who wrote "The Art of War," could not have achieved a better move, wrote J.P. Gownder, consumer PC analyst at Forrester Research, in a report. "Acer strategists calculated several moves ahead in the global PC chess game. If the execution is solid, this deal will create a powerful third-place PC competitor that will challenge HP and Dell by 2009, and portends the rise of non-Japanese Asian PC superpowers," he wrote. But in the near term, stock market analysts and investors couldn't have disagreed more. Almost in unison, they criticized the deal as too expensive, too complex and unnecessary for Acer's growth. "The premium paid to Gateway may be too high, and the execution risk of a multiple-brand strategy is clearly the key here," said Vincent Chen, PC industry analyst at CLSA Asia-Pacific Markets in Taipei. The negative comments hurt Acer's stock. The shares fell 10.6 percent this week to end at NT$57.9 (US$1.75) Friday on the Taiwan Stock Exchange. But the view of the financial sector may be short sighted. Analysts at industry researchers such as Forrester, IDC and Current Analysis West take a longer-term perspective on the deal. Acer and Gateway may lose some market share immediately following the merger, which is normal, according to Richard Shim, an analyst at IDC. But over the long term the deal will give it the size and clout to gain market share and source components. "The opportunity for Acer in acquiring Gateway is the consumer market segment and particularly the retail channel," he wrote in a report. "The acquisition of Gateway will not necessarily position Acer to be a competitor on the level of Dell and HP but it lays the ground work for Acer to be a more significant player in the largest market in the world [the U.S.] and in the fastest growing segment of that market." Current Analysis West analyst Toni Duboise believes Acer could triple its U.S. market share with the addition of Gateway-branded desktops and notebooks, and eMachines' value PCs. The impact of the deal will take months, even years to ripple through the market, analysts say. Not only did Acer add significantly to its size,Â it also stopped Lenovo from increasing its presence in Europe. Lenovo had been in talks to buy Packard Bell BV, but by picking up Gateway, Acer was able to block the deal. Gateway held the right to refuse any deal to buy Packard Bell and make its own offer due to an older contract between the two companies. Stock market analysts argue that buying Packard Bell is a waste of time for Acer because the company is already strong in Europe. But industry researchers, and Forrester in particular, argue the move staved off a Lenovo ploy that might have hurt Acer in Europe. To be sure, merging companies isn't easy. Acer's ability to join company cultures, keep valuable workers and create product strategies that make sense will be the key to the success of the deal. The company has many recent examples to learn from, most notably HP's purchase of Compaq and the sale of IBM Corp.'s PC division to Lenovo. Rob Enderle, industry analyst at the Enderle Group, warns that Acer needs to make sure it keeps people from Gateway with experience in acquisitions, such as those who worked to make eMachines a part of Gateway after that deal. "This is also an ideal time to take a look at all of the technology both companies are using, both HP and Lenovo waited until late to get rid of a lot of the out-of-date operational technology the companies were using and that hurt both a lot. Particularly in the case of HP and the PC Company side of Lenovo, updating the core operations technology was critical to the success both firms are experiencing now," Enderle said. Time will tell if Acer can execute its merger strategy as well as its battle plan for the global PC market. Â
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Moo moos investor concerns over Gateway Computer maker Acer is looking into the possibility of a Chinese acquisition following its decision to buy US-based Gateway.â¦
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By The Associated Press  IRVINE, Calif. - Gateway Inc., the third-largest personal- computer company in the United States, said Friday it rejected an unsolicited $450 million bid for its retail business from eMachines Inc. founder Lap Shun Hui.  Gateway said the Aug.