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September 19, 2005

Acer To Sell Home Electronics In U.S.

Courtesy of Digital Connect

Acer next year plans to release a line of digital home products in the United States as it continues a measured expansion in the region that started with notebooks.

Acer CEO Gianfranco Lanci said the burgeoning digital convergence market represents an important growth segment for the Taipei, Taiwan-based computer maker, and he plans to position the company relatively early in the space. Though big-name consumer electronics manufacturers now have a foothold in U.S. living rooms, he said their insistence on high margins and proprietary products could be their downfall as the digital home space picks up steam.

PC companies, which have perfected operations in a fast-moving, low-margin environment and focus on standards-based products, ultimately will win in the digital home space worldwide, Lanci said.

"The PC life cycle is relatively short and getting shorter," Lanci said at a press conference for European journalists. "For [digital] convergence products, it will be the same."

On Saturday, Acer unveiled a Media Center PC and notebook, a media gateway and several LCD televisions, topped by a 37-inch model. The products are earmarked for the European market, where Acer is one of the leading notebook brands.

Lanci said Acer will first test the products in Canada before bringing them to the United States. Specific products for the North American market and pricing information have not yet been determined.

What Acer considers an early jump into the digital solutions market is notable in part because of the company's conservative business principles. Lanci, who runs Acer from Milan, Italy, is known for running a tight ship. He said Acer favors incremental expansion in terms of regions and product segments.

"Our current philosophy is to go step by step," he said. "We don't want too many products at one time."

Acer sells primarily notebooks and desktops through its Acer America division in San Jose, Calif. Though the company also offers servers through some partners, those products won’t be a focus in the United Sates at least for the next 12 months, Lanci said. Acer America sells servers mainly to small businesses, and the company would need to further develop its service and support infrastructure to meet the demands of enterprise customers, he said.

Instead, Acer America will continue to focus on notebooks. Acer is now the No. 8 notebook manufacturer in the United States, and Lanci said he would like to boost its market standing. "By the end of this year, we would like to be No. 5 or No. 6 in notebooks," he said.

Notebook prices will continue to drop, and Acer is working to tighten its operating expenses and increase volume to keep profit consistent, according to Lanci. To that end, the company aims to sharpen operational efficiencies in supply chain, he said.

Acer sells exclusively through the channel, and the company doesn’t plan to cut back on channel operations, service or support as it prunes operational costs, Lanci added. "We believe you can manage accounts with a limited number of people, unlike our competitors," he said.

Though competitors such as Hewlett-Packard and IBM may have more channel representatives that can serve partners, Acer offers something more valuable, Lanci noted. "We are consistent and predictable," he said. "We have a different structure in terms of organization, and we are leaner. But we can be much more quick in making decisions."

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