Acer aims to be No 2 in China

By Wang Xing (China Daily)
Updated: 2010-12-10 07:59
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Acer aims to be No 2 in China
Visitors look at laptop computers in the Acer Inc booth at Computex Taipei 2010 in June. The PC manufacturer is increasing its investments in the mainland with the goal of overtaking its rivals in domestic market share. Maurice Tsai / Bloomberg

PC maker calls recent moves prelude to more aggressive expansion

BEIJING - In China, where PC maker Lenovo Group dominates with nearly 30 percent of market share, there seem to be few opportunities left for smaller players to significantly shake up the market in the short term. But Acer Group is obviously ready to take the challenge.

This year, the Taiwan-based PC maker has made several key deals, including acquiring Founder, a smaller Chinese competitor, in May and invested $150 million this month in the southwestern city of Chongqing to build a factory.

Acer says these moves are only a prelude to its aggressive expansion in the world's second-largest PC market.

Gianfranco Lanci, chief executive officer of Acer, sees China as still "having huge potential".

He said the company hopes to become the second-largest player in the mainland's PC market in the near future, following Lenovo.

He predicts China will surpass the United States to become the world's biggest computer market within three years.

According to International Data Corporation (IDC), a market research company, Acer ranked sixth in the mainland's PC market, with a second quarter market share of 3.6 percent, while Lenovo had 28.7 percent.

Acer has limited sales channels compared with most of its rivals, such as Dell and Hewlett-Packard.

Antonio Wang, research manager at IDC China, told China Daily that it will be "very hard" for Acer to outperform Lenovo and Dell in the short term, but he noted that the company has great potential since its deal with Founder, which helped to boost Acer's market share to about 10 percent in the mainland market.

Under the partnership, Acer announced in August it will pay up to $70 million to use the Founder brand name in the mainland over the next seven years and will also handle most of the operations for Founder's PC business, including planning, marketing and supply-chain management.

Oliver Ahrens, president of Acer China, said in October that the partnership, in addition to Acer's expansion plan into more parts of the country, will increase its revenue in the mainland by 40 percent this year to $1 billion.

He predicted that the mainland will rise to 25 percent of the company's total revenue in 2011, up from 5 percent last year.

Recent activity suggests Acer has the ability to gain market share with rapid expansion through mergers and acquisitions.

In 2007, the company took over Gateway, a deal that also gave it control of European computer maker Packard Bell, which helped Acer overtake Lenovo and Dell to become the world's second-largest PC vendor.

"We never said we want to be number one ... but we want to become number two, and we are almost there," Lanci said.

China Daily

Acer aims to be No 2 in China