Acer number two in computer sales worldwide

We may be very passionate Apple fans but it would be foolish of us to ignore the fact that Apple has a very small slice of the overall computer market and as successful as the iPhone has been the sales of the smartphone is still small compared to overall mobile phone sales. Other computer manufacturers play a completely different game than Apple and it’s interesting to look at what the situation is like for them to perhaps better understand Apple.

Taiwan-based Acer has been one of the shining stars on the personal computer scene for some years now and they’ve just recently taken over the number two spot in overall computer sales worldwide from Dell. That’s all computers including desktops, notebooks, etc. According to Krishna Murthy, Managing Director Acer Middle East and Africa, Acer is “very close” to taking over the number one spot from HP and Acer aims to take the throne in 2011 in terms of the mobile PC segment.

In notebooks Acer is doing even better in our region – Middle East and Africa – where they are number one in notebooks. Acer obviously sells computers under the Acer brand but they also offer computers under other brands. Over relatively few years they’ve acquired Packard Bell (2008), Gateway (2007), and eMachines (also 2007, through the acquisition of Gateway). They way that Acer sees this is that different brands attract different customer segments and they want to bring out products that cater to all possible buyers.

Mr Krishna said that what drives Acer is bringing the latest technologies to customers in whatever kind of product that they’re looking for. He said “We’re focused on what the customers want, basically. So whatever technology is available we partner that up with the right product. We ask customers what is it you’re looking for? What do you need at the end of the day?” It’s clear from Acer and other companies that what customers increasingly demand are mobile computing devices. Mr Krishna said that approximately 220 million notebooks are sold worldwide out of around 400 million total PCs. In terms of mobile phones, Mr Krishna explained, about 1.2 billion units total units worldwide with 270 million being smartphones. That means there is a combined market of  about 500 million units of “internet centric products”. Netbooks are about 15% of total notebook market but around 2012 that figure will be around 25%. According to Mr Krishna, that figure won’t go much beyond that depending on how technology develops.

Acer Timeline with over 8hr battery life

In the mobile segment, thinner, lighter, and better battery life, is where things are heading, said Mr Krishna. He mentioned a coming Acer product with 12 hour battery life. Acer sees a clear segmentation in the mobile segment, mainly separated by screen size: up to 5-inches – smartphones; up to 8-inches – MID (Mobile Internet Device); up to 11-inches – netbooks; and over 12/13-inches notebooks. Another way the segmentation works is that it’s only in the notebook segment consumers create content, in the lower three segments the focus is on consuming data. Also, smartphones and MIDs are predominantly touch and one-hand operated; netbooks and notebooks may have touch but are mainly two-hand operated.

Mr Krishna revealed, to my surprise, that the majority of netbook buyers buy their netbook as a secondary device to a notebook, not to a desktop. Already today notebooks account for about 55% of total computer sales and in another few years, Mr Krishna said, that figure will be about 70%. He also mentioned that the total cost of ownership is less with a notebook compared to a desktop and that studies have shown increased productivity when people use a notebook. These are perhaps not surprising facts but they seem fundamental to understanding Acer’s hard push in the mobile segment.

Windows 7, just launched by Microsoft, will be driving consumer demand for the considerable future, said Mr Krishna. The business segment will follow but they’re more careful in their investments and it will take a while for them to get onto Windows 7 in a big way. According to Mr Krishna, whatever problems or “deficiencies” that were present in Windows Vista should now have been fixed in Windows 7. It will bring a “better customer experience,” he said. One new thing that Windows 7 brings is touch capability built-in to the OS. That’s something that Acer will take full advantage of in both desktop and notebook computers. Windows 7, he also said, also brings better performance and new functionality to the mobile computing segment, which in turn offers exciting opportunities for Acer.

For me, it was a very rewarding experience to talk to a senior executive in a major consumer electronics company like Acer. I dont’ think Acer and Apple really see themselves as direct competitors but as an Apple fan I can certainly say that there is much to admire and take note from in Acer’s quick march up the global scale of computer manufacturers.

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