Do-or-die time for Acer as it hunts for winning strategy

Acer may turn to high-end products as a way to revive its business, but analysts say it won't be easy

By , IDG News Service |  IT Management

Selling higher-end PCs could help stop the bleeding in Acer's finances, but with the overall PC market still shrinking it's unlikely to help it expand in any meaningful way. "You can't really expect vendors in desktops and notebooks to find growth," Wang said. "You win in the market by not falling in shipments."

Acer might have to try breaking into other markets or raise its profile among business customers. Some of its rivals have taken that path, with Lenovo buying up PC makers in growth countries, and Dell and HP selling enterprise "solutions" that include services.

"If Acer continues to only sell PCs, in just a few years' time it will be over for them," predicted Gartner analyst Eileen He. "If you're simply a hardware maker, it's not enough."

Acer's fortunes reflect the collapse of the larger PC market as a whole, which led HP to consider selling its PC business and has forced Dell to make itself a private company.

Acer's big Taiwanese rival, Asustek, has also seen its PC sales decline. But its willingness to experiment with innovative, sometimes off-the-wall products has helped bring strong growth to its Android business, and its profits haven't suffered like Acer's.

HP and Dell have much broader businesses to fall back on, giving them some leeway as they try to build effective tablet and smartphone strategies. But for Acer, with its narrow focus on consumer PCs, any big change will be easier said than done, potentially requiring it to invest more in research and development, overhaul its supply chain and build new brands.

"You can't just turn a big boat on a dime," IDC's Ma said. "It takes time to make that course correction. The question is how quickly can they turn their boat."

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