Categories: Workspace

Acer Looks To Exploit HP PC Uncertainty

The continuing turmoil surrounding Hewlett-Packard’s PC division is reportedly giving Acer a perfect opportunity to gain customers and expand its business.

In a recent interview with German daily newspaper Frankfurter Allgemeine Zeitung, Walter Deppler, who heads up Acer’s European business, said HP’s recent moves – from announcing plans to spin off its PC business to replacing Leo Apotheker as CEO with former eBay chief Meg Whitman – has created confusion and concern among customers.

It also has opened up opportunities for Acer, Deppeler said.

Customer Uncertainty

“That is a major chance for us because big customers and resellers are uncertain. They are asking themselves: what’s next, who can I work with?” Walter Deppeler said, according to a prerelease of the newspaper’s 27 September edition. “We want to use this as an opportunity for us.”

In the 11 months under Apotheker’s tenure, HP saw its revenue forecasts fall, its stock prices drop and jarring shifts in strategy that left shareholders angry and customers shaken. Most recently, Apotheker announced that the giant tech vendor was ending development of webOS-based mobile devices – including tablets and smartphones – and spin off its PC business to concentrate more on enterprise software and services.

Analysts were mixed about the decisions, but investor reaction was harsh. HP directors fired Apotheker this month and replaced him with Whitman, another move that was met with a range of reactions and did little to clear up HP’s direction.

“Our prognosis is that without [the Personal System Group], HP’s value proposition will be much weaker in SMBs,” Sanjeev Aggarwal and Laurie McCabe, analysts with the SMB Group, wrote in an 31 August research note. “PSG not only provided an entrée to upsell servers and services, but has been, for all intents and purposes, HP’s major marketing arm and ‘voice’ to these businesses.”

Strategy Rethink

For Acer, any confusion or doubt in the PC space could provide a much-needed boost. The company, which a couple of years ago vaulted to the number-two spot among global PC vendors on the strength of its netbooks and notebooks, fell to fourth in the second quarter, according to market research firm Gartner. The analysts said that HP grew its share of the market to 17.5 percent, followed by Dell at 12.5 percent and Lenovo at 12 percent. Acer’s share dropped to 10.9 percent, from 14 percent in the same period in 2010.

Gartner analyst suggested that Acer executives needed to come up with a new strategy in the space.

“Acer dropped from No. 2 to the No. 4 position in the worldwide PC market in the second quarter of 2011,” the firm said in a statement. “It had a great deal of inventory in the distribution channel in the Europe, Middle East and Africa (EMEA) region. Acer’s problems stemmed from its low-price, high-volume business model, which is no longer effective.”

Post-PC Future?

There is an ongoing debate about what the future of the PC market is. Former Apple CEO Steve Jobs said the industry had entered a “post-PC era,” a position supported by others, including Mark Dean, CTO of IBM’s Middle East and Africa unit and one of the creators of the IBM 5150 personal computer, the system credited with kicking off the PC era.

Others have argued otherwise, noting that despite the slowdown in PC sales in recent quarters, the market is still strong. Gartner reported in the second quarter that PC shipments worldwide passed 85.2 million, a 2.3 percent increase, which was below the firm’s earlier projection of 7.6 percent. Analysts from a number of firms have pointed to several reasons – from the rise in tablet sales to economic worries – for the slowing of PC sales.

At the Intel Developer Forum, Mooly Eden, vice president and general manager of the chip maker’s PC Client Group, noted that the industry sells about 1 million PCs every day, and that notebooks are still the form-factor of choice in emerging markets. Intel also is pushing its ultrabook concept as the future for the PC market.

Acer is not the only vendor seeing opportunity in HP’s decisions. Dell CEO Michael Dell said in an interview with The Financial Times that PCs are still a core part of his company’s business model.

“There are a billion and a half PCs in the world, and while Gartner [analysts] change their estimates here and there, they also estimate there will be 2 billion PCs in the world by 2014,” Dell said this month. “When I look at that, I think the idea that the PC is no longer here is complete nonsense. You see PCs, tablets, you see smartphones. But those other devices aren’t necessarily replacing the PCs, so we are very committed to that part of the business, as part of this broader, end-to-end IT solutions company.”

Jeffrey Burt

Jeffrey Burt is a senior editor for eWEEK and contributor to TechWeekEurope

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