Acer Founder Predicts Extinction of US PC Makers

Dell and Hewlett-Packard will not look kindly on the latest comments attributed to Stan Shih, founder of Taiwan-based Acer, who predicted that they may not be in business in 20 years’ time, due to their alleged inability to produce inexpensive PCs.

“The trend for low-priced computers will last for the coming years. But US computer makers just don’t know how to put such products on the market,” Shih reportedly told the Commercial Times, according to a 19 January report from AFP.

Shih continued, “US computer brands may disappear over the next 20 years, just like what happened to US television brands.”

Analyst Roger Kay, with Endpoint Technologies, believes Shih has a point, and that the remark could serve as a wake-up call.

“Even Apple has its devices made in Asia. But I certainly wouldn’t count the US industry out. Most useful innovation is still made in the USA,” Kay told eWEEK. “If anything, we should take his words as a goad to double down and do more to ensure that our industry remains relevant in 20 years’ time.”

In the fourth quarter of 2009, as well as for the year overall, HP led shipments both worldwide and in the US during the quarter, Acer grabbed the number-two spot, just ahead of Dell. However, worldwide for the year, it was Dell that held the second-largest market share, according to 13 January report from IDC. Following Dell were Asia-based manufacturers Acer, Lenovo and Toshiba.

PC sales figures in 2009 were helped by brisk consumer acceptance of netbooks, which generally have price points below $400 (£246). Overall, however, their low prices are said to have negatively affected PC market revenue.

“Acer has had a great couple of years, much of it due to the popularity of netbooks and other low-cost products,” Charles King, an analyst with Pund-IT told eWEEK. “In addition, the company stands to profit as the demand for personal computing grows in rapidly developing markets like China. If PCs eventually become simplistic, appliance – like devices with little if any differentiation in the hardware, like DVD players or toaster ovens – then Mr. Shih’s notions stand a chance of coming true.”

However, King added, he doesn’t expect US vendors to relax their pace of innovation anytime soon.

“I also believe that Mr. Shih’s assumption that PCs will even be around in 20 years may be far off the mark,” King said. “Given the continual pace of IT evolution, I expect that the personal computing devices we’ll be using in 2030 will make Acer’s current product line-up look like 1990 PCs with 286 Intel processors and the first version of Microsoft Office.”

Analyst John Spooner, with Technology Business Research, also expects a far-different 2030.

Given that Shih’s remarks weren’t taken out of context, “I also think that he’s probably right in that the US-based PC vendors will not exist in 20 years in the same ways they do today,” Spooner told eWEEK. “I think they’ll look and act much different. They’ve already begun laying the groundwork to increase their purview from hardware to hardware, software and services. Just look at what Hewlett-Packard has done in the last three years. They will continue to evolve and change from there.”

Endpoint Technologies’ Kay, also confident about the pace of US tech innovation, added, “All you have to do is breathe the air in Silicon Valley and you know there’ll be innovation coming out of here for years to come.”