Taiwan's Acer to buy Gateway as foils Lenovo
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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 Inc., the world's fourth-largest computer vendor by unit sales, plans to acquire U.S. computer maker Gateway Inc. for $710 million, the Taiwanese company said Monday.
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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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Acer's deal to acquire Gateway for $710 million has derailed Lenovo's plans to acquire Packard Bell.
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Taiwanese PC vendor Acer predicts its PC shipments will grow as much as 35 percent this year led by a strong notebook PC market, a pace of growth that could see the company challenge U.S. rivals by the end of this year.Acer&#39;s revenue grew 25 percent last year to NT$461.7 billion (US$14.42 billion) and the company made inroads to the world&#39;s largest PC market, the U.S., by acquiring Gateway. The revenue figure is preliminary and only includes Gateway&#39;s last two and a half months of the year because the merger process took place late in the year.Acer bought Gateway&#160;for US$710 million last year.But the figures and PC shipments had a tremendous impact on Acer&#39;s global PC rankings in the final three months of 2007.The company took a solid third place in global PC shipments last year,&#160;topping Chinese rival Lenovo and gaining ground on Dell. Acer&#39;s global PC shipment market share during the fourth quarter of 2007 reached 9.6 percent in the fourth quarter, up 60 percent over the same time a year earlier, according to IDC, the industry researcher.Lenovo, which had been jockeying for third place with Acer all year, fell to fourth with a 7.5 percent share of the global market. HP retained its first place ranking with 19 percent market share, while Dell remained firmly in second place at 14.6 percent.&quot;Combined Acer/Gateway growth continued to be the fastest among the top vendors and is a very solid performance for the first quarter of merged operations,&quot; IDC said in a statement. &quot;Acer also clearly established itself as the third largest vendor, overtaking Lenovo, and seems to be handling the Gateway integration quickly,&quot; the statement says.This year, Acer forecast its PC shipments overall will rise between 30 percent and 35 percent, led by 40 percent shipment growth in notebook PCs. Such strong growth could help the company challenge Dell, which saw its PC shipments grow only 1.7 percent in 2007, according to figures from Gartner. The market researcher put Acer&#39;s shipment growth last year at 32.9 percent for the year.Acer&#39;s chairman, J.T. Wang, predicted last October that Acer could take up to a 12 percent share of the global PC market, putting it in the position to challenge Dell.Acer&#39;s net profit was NT$12.9 billion in 2007, up from NT$10.2 billion a year earlier. The company&#39;s 2007 figures are all preliminary, Acer said. Final results will be published later.&#160;
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Gateway Inc. (GTW.N), the computer maker that recently shuttered its chain of 188 stores, will begin selling its desktops at CompUSA Inc.'s outlets later this week, the two companies said on Monday.
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Taiwan&#39;s Acer Inc will buy  Gateway Inc for $710 million to double its U.S. presence and  unseat China&#39;s Lenovo as the world&#39;s No. 3 PC maker, while  dealing a blow to its efforts to grow in Europe.
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Taiwan's Acer Inc , the world's No.3 computer vendor, said on Friday that one of its own executives will replace the chief executive of its newly acquired Gateway unit.
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Acer agrees to take over US PC-maker Gateway creating the world's third largest producer of computers.
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Gateway will launch a complete line of notebook PCs as one of many steps to revitalize its business after merging with Acer.
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Acer shares are down on the Taiwan Stock Exchange, as investors think it paid too much for Gateway.
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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 Inc.'s shares fell sharply Tuesday, one day after the Taiwanese computer maker said it would acquire Gateway Inc. for $710 million.
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(InfoWorld) - Shares of Asian PC makers are finally shaking off their summer doldrums as back-to-school sales give them a boost and the upcoming launch of Microsoft's new Vista OS improves their longer term prospects. A buying binge on stock of Taiwanese PC maker Acer started early this week after it was upgraded by Merrill Lynch & Co.Â and a few other large investment banks. The firms noted that after sluggish sales in the first half of the year,Â demand for PCs is on the rise. TheÂ microprocessor price warÂ between Intel and Advanced Micro DevicesÂ (AMD) saw the price on some desktop chips halved, lifting PC demand, analysts say. Microsoft's new OS is expected to come out on time and give the PC market an additional long term boost. "The PC replacement cycle should take place gradually following Microsoftâs launch of its new operating system, Vista, in the first half of 2007," said Daniel Chang, computer industry analyst at Macquarie Research Equities, in a report on Thursday. Acer's shares were also boosted this week after it reported a better-than-expected 36 percent increase in second quarter net profit to NT$3.08 billion (US$93.59 million). It's shares ended up 25 percent for the week, at NT$53.5, on the Taiwan Stock Exchange. Acer's main rival in Asia, Lenovo Group, also saw its stock rise. The company'sÂ U.S.-listed shares increasedÂ 11.2 percent to US$8.45 for this week, as of its close on Thursday. By comparison, Dell and Hewlett-Packard have been laggards. Dell shares are up 3.9 percent so far this week to end at US$22.60 on Thursday, while HP had gained 3.8 percent to US$36.56 over the same time. One reason for the difference in share performance is that Acer and Lenovo stock fell further this year than their U.S. rivals due to PC market concerns andÂ company-specific issues, analysts say, so it's no surprise the rebound has lifted them higher. Another reason Dell and HP have underperformed their Asian peers recently is because U.S. investors are concerned about the economy, including consumer demand and the likelihood of further interest rate increases. Although very little conclusive data is out for U.S. PC sales right now, analysts say demand in Asia is strong, and Europe is heating up. Henry King, executive director of technology research for Goldman Sachs (Asia), noted in a report on Wednesday that strong PC component demand in Europe over the past few weeks should help allay concerns over possible U.S. weakness. "Besides, we expect more Europeans to come back from summer vacations in the next few weeks, so sell thru data is likely to continue to trend up in September," King said. Another factor hurting shares of PC makers this year has been cutthroat price competition. But stronger market demand should ease price competition, analysts say, as should lower costs for microprocessors. In short, the seasonal demand from back-to-school and back-from-vacation sales going on now should extend for quite a while as users continue buying when Vista launches. The strong, steady demand should allow PC makers to charge reasonable prices, increasing their profit margins and making investors happy.
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The personal computer industry is in for a wave of consolidation, the president of Acer  said on Friday, adding the Taiwanese PC maker did not plan any buys itself for up to two years.
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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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Taiwan-based PC maker Acer and Yahoo signed a multi-year partnership to set Yahoo as the default search engine on all Acers sold globally.