Acer outlines plans for future growth

TAIWANESE COMPUTER firm Acer outlined its further plans for world domination this week.

Since moving away from its roots as a manufacturing dynamo, having been wooed by the American model of not dirtying one's hand by doing the hard work and simply marketing the bejesus out of its designs instead, the company has made startling progress in pinching market share.

The firm sold off its manufacturig interests long ago and now with its new Italian boss is rapidly westernising its business practices. Its aggressive approach is demonstrated in the UK where it claims a 57 per cent volume growth rate in its core product - laptops - in 2006. The stance - based firmly on its channel model - pushed it to the top spot in the UK in December, according to Gartner.

UK MD Gianpierro Morbello strongly denies that its success is purely based on cutting its own margins. Rather, he says, the firm's ability to supply both volume and a wide range of notebook offerings has allowed it to grow at the expense of its competitors. He acknowledged too that he owed the INQ a beer or two for publishing the pictures of a certain exploding laptop that caused arch competitor Dell a few headaches in the past year. He refused to write Dell off however.

"Dell is big enough to survive," he said. "Michael Dell is back and Dell is still strong. Six months of issues is not necessarily a long-term problem."

Rather than simply hoping that the competition will wither and fold, Acer has gone about reorganising itself in order to better address what it perceives as the needs of the market. This means splitting up the market into three main areas.

The first is what it terms mobility. And here it's talking not only notebooks but devices such as PDAs, handhelds and so forth. Morbello specifically mentioned Wimax as a technology which may significantly impact this area in the "coming quarters".

A second area is the enterprise, or, more accurately if more clumsily, Acer talks here about "stationary IT". In the professional and small to medium-size business space, Acer is expecting big things of small form factor PCs. The channel, Marbello says, wants more flexibility inside the small boxes. The firm also sees plenty of opportunity in the server space but not in the UK. At least not yet. But throughout EMEA Acer has decided to restrict itself to a few key vertical markets in servers.

The third area of activity is what Acer terms convergence or Morbello calls convergency.

He reckons the merging of consumer electronics devices and IT will "happen strongly and faster than expected." Although some may say it has already taken ten years to get going.

In Acer's view, the key convergence device is the television. Which is why it began flogging televisions last year. Morbello reckons televisions will form an important part of Acer's revenue and the likelihood is that the televisions themselves will become increasingly complex, replacing the multitude of scattered boxes in the average living room.

He talked about pairing TVs up with Viiv boxes, while the TV will act as a "media gateway" with content increasingly coming from he Internet rather than established broadcast channels.

To back up the aggressive strategy being perused by Acer, high-profile sponsorship deals are seen as key to a successful branding exercise. The firm already sponsors the Ferrari Formula One team and is also a main sponsor of Inter Milan football club.

In the coming weeks the firm will announce the details of a new sponsorship deal with Barcelona FC, the team reckoned by Morbello to currently be the most famous in the world. The costs of the deal he wouldn't reveal. More deals are in the pipeline, another upcoming venture will involve Moto GP.

The strategy is pretty straightfoward. Increase the value of the brand through high-profile sponsorship and advertising deals while keeping the channel and retails shelves like those of Tescos stuffed full of Acer kit.

While once-mighty Dell has even been reported to be reappraising its direct-only mode;, Acer is demonstrating considerable flexiblity in its approach to the market. And it looks set to continue to make a killing.