Acer Inc, the world's fifth-biggest computer maker by shipments, plans to triple its global market share within the next five years, which may include mergers and acquisitions, chairman Wang Jen-tang (王振堂) said.
"In four to five years it is highly possible" to have about 10 percent market share from the present 3.6 percent, Wang, 50, said in a March 11 interview in Taipei, where the company is based. "Maybe we have to be more open after we have seen so much consolidation."
He didn't provide further details.
The US government this month cleared China's Lenovo Group Ltd's (聯想) US$1.25 billion purchase of International Business Machines Corp's personal computer business, which would make the Chinese company the world's third-largest PC maker. Combining with another brand may be the way for Acer to increase share in the US$183 billion market dominated by Dell Inc, investor Winnie Tiao (刁明華) said.
changed dynamic
"The IBM-Lenovo deal changes the dynamic of the market," said Tiao, who oversees the equivalent of US$2.4 billion as chief investment officer at HSBC Asset Management Taiwan. "Acer has to think about its strategy and position itself if it wants to continue playing the game." Tiao, who does not own Acer shares, has an "underweight" recommendation on PC-related stocks, citing competition.
Acer shares, which rose 9.2 percent last year, have declined 4.8 percent this year. The stock fell 2 percent to NT$50 (US$1.63) at the close of trading in Taipei. The computer maker trailed Dell, Hewlett-Packard Co, IBM and Fujitsu Siemens Computers Holding BV in terms of shipments last year, according to a Jan. 18 report by International Data Corp, a research firm.
A 10 percent market share would lift Acer to the third slot.
"Combining with other brands would definitely save much more time for Acer to build up its market share" than growing on its own, said Charles Chen, who helps manage the equivalent of US$150 million at JF Asset Management Co in Taipei. Available and practical opportunities for Acer "are small and local brand names in emerging markets, rather than global brands."
market share
Wang said Acer may be able to increase market share when its rivals are reorganizing their businesses. Acer was able to increase its share from an earlier reorganization, when Hewlett-Packard Co bought Compaq Computer Corp in 2002, analysts said.
The sale "afforded Acer a great opportunity to take market share," said Kevin Huang, an analyst at Macquarie Research in Taipei. "The IBM-Lenovo deal should do the same, particular as Acer is starting to push back into the US market."
Hewlett-Packard, the world's second-largest PC maker, last month ousted Carly Fiorina, who staked her name on the US$18.9 billion Compaq purchase. The acquisition failed to boost profit and the Palo Alto, California-based company lost its lead in the PC market to Dell.
Hewlett-Packard's global market share dropped to 15.8 percent last year from 16.2 percent in the previous year, according to IDC. Dell, the biggest PC maker by shipments, raised its share to 17.9 percent last year, from 16.7 percent in 2003.
Acer's notebook business across Europe gained most of its market share in the past three to four years from Hewlett-Packard, Wang said. It also gained from Japan's Toshiba Corp "and a small share from Dell."
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