Acer: Last Man Standing

Will the Company Live up to the Rhetoric?

Acer_lAt an event in New York City yesterday, Acer CEO Jason Chen introduced a series of new products including activity trackers, smartphones and two-in-one computers. The Taiwanese company has been building its device portfolio to address the market for connected lifestyles. Acer says that several of its new PCs are aimed at enterprise users, but its product range and pricing have a clear consumer focus.

The computers introduced at the event tread the hazy dividing line between laptops and tablets, with all performing double duty in some way. Touch-based laptops are becoming a norm, and the use of magnets and 360-degree hinges are making two-in-one devices more common.

The company’s new line of keenly priced Windows-based hybrid devices should grab the attention of all laptop and tablet makers. Acer’s new Aspire R11, for example, is foldable in a similar way to Lenovo’s Yoga series. However, with prices starting at $250, the R11 isn’t a premium product. Acer’s new Switch 10 is a magnetic-based detachable priced at about $280, bringing it into the same price range as the company’s tablets.

Acer has successfully established its brand as a consumer electronics maker. It’s been particularly strong in the PC market, ranking as a top-five player for more than a decade. Mr Chen declared that his company would “be the last man standing in the PC industry” — it’s fighting talk, but a reminder of how the ranks have dwindled over the years. PC brands like Compaq, DEC, IBM and Siemens have been absorbed, and others have folded. Even top brand Hewlett-Packard is breaking itself up to concentrate on services rather than hardware.

Commoditization has led to low margins and extreme concentration in the PC market. Acer doesn’t appear quite so bothered by this, competing on cost while driving higher-end features down to lower price bands. The company’s push into smartphones and wearables will be important to track: its share is still small, but sharp strategies of a player like Acer can affect the entire market. The company’s success in adjacent markets will take more than bold talk, but it continues to cement its position in PCs. It’s becoming a hybrid leader in many respects.

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