Taiwan Business Alliance: Acer Inc goes after HP in Europe

By Bill Heaney  /  STAFF REPORTER

Tue, Oct 21, 2003 - Page 2

The nation's largest computer company, Acer Inc, plans to knock Hewlett-Packard Co (HP) off its No. 1 perch as the largest seller of notebook computers in Europe.

HP and competitors IBM Corp and Dell Inc are concentrating too much on direct sales over the Internet at the expense of traditional store purchases, Acer president Wang Chen-tang (王振堂) told a delegation of foreign reporters yesterday.

"We believe in the fourth quarter we will be even closer to No. 1," Wang told an 20-member delegation in town for the 2003 Taiwan Business Alliance Conference.

"Our internal plan is to be No. 1 within two years. We have already surpassed Dell for many quarters," he said.

Acer's competitors have jumped on the Dell -- pioneer of direct sales to customers over the Internet in the 1990s -- bandwagon, but the move is flawed, Wang said.

"HP and IBM have a loser's [mentality]," Wang said. "They think they can only survive in the direct model and have totally given up on other channels."

"They are not thinking how the two can co-exist. When they focus on direct sales, they can only be second-class direct, as they are studying Dell's model from three years ago. Dell has progressed since then," he said.

Acer has paired up with major retailers and distributors across Europe to make sure its computers are on as many store shelves as possible. Its partnerships include major retailers Dixons and Mediamarkt in the UK and Germany, France-based Carrefour hypermarkets, Europe-wide distributors Tech Data Corp and wholesellers Ingram Micro Inc, Wang said.

Acer's policy of not abandoning stores, combined with cost-cutting, seems to have paid off, according to a report released last Thursday by US-based technology research firm International Data Corp (IDC).

"Acer recorded another outstanding quarter with over 55 percent growth overall, primarily driven by strong notebook sales," the report said.

"The vendor clearly continues to gain ground in Europe, the Middle East and Africa, consolidating a strong No. 2 position in the notebook market through increased presence in both the distributor and retail channels," the report said.

However, when desktop computers are added to the figures, Acer drops to fourth place, behind Dell and Fujitsu Siemens, IDC's figures show.

Acer sold 656,000 computers in Europe last quarter compared to 422,000 in the third quarter last year, compared to HP's 2.1 million last quarter.

IDC does not break down the figures for notebooks in its press release, but says notebook sales in Europe increased 51 percent last quarter compared to the same period a year ago.