Acer Inc, the world's No. 4 PC vendor, said yesterday it has signed an agreement to sponsor the 2010 Winter Olympic Games in Vancouver and the 2012 Olympic Games in London to boost brand awareness in Europe and North America.
Lenovo Group Ltd said on Wednesday it was ending its top-level support after the Beijing Games next year.
The announcement makes Acer the first Taiwanese company to become a top Olympic Games sponsor. The company will supply primarily Acer and Gateway brand PCs for the games.
"We analyzed the benefits of our sponsorship efforts and the result was extremely positive: The careful choice of associating our company with established world leaders in their respective sectors has helped grow the brand perception of Acer around the world," Acer chairman Wang Jeng-tang (王振堂) told a press briefing.
The sponsorship will help strengthen Acer's leading position in Europe and lift its ranking in North America from No. 3 to No. 2, Wang said.
To ease investor concern about the expenditure, Wang said the amount would be very affordable for Acer, which spends 2 percent of its annual revenues on marketing activities.
The company said it would pay for the sponsorship in the next four to five years, but declined to disclose the investment amount, citing a non-disclosure agreement with the International Olympic Committee.
Acer expects double-digit annual growth in revenues to US$20 billion next year and further growth to between US$30 billion and US$40 billion in 2012. That means the company may allocate around US$800 million to promote its products.
"The spending [for the sponsorship] will be far less than that [US$800 million] and will be a very small part of our overall marketing outlay," an Acer official told the Taipei Times on condition of anonymity.
While the company was upbeat about the sponsorship and expects the use of Olympic symbols such as the five rings to better promote its products worldwide, analysts were cautious about its impact.
"The sponsorship will have a positive impact on Acer's brand image, but we do not think it will boost Acer's PC sales in the short term," Vincent Chen (陳豊丰), an analyst with CLSA Ltd's Taipei branch, said by telephone.
Acer was a sponsor of the Asian Games in 1998 in Thailand. This has helped the company build a strong foothold and boost sales in Southeast Asia, it said.
“But, a growing number of investors take the sports game sponsorship more negatively because of limited help for its sales,” said Eddy Tseng (曾可加), an analyst with SinoPac Securities Corp (永豐金證券).
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