Acer's $710 Million Acquisition Of Gateway Gives Dell A Cow

By Eric Lundquist  |  Posted 2007-08-27 Email Print this article Print

Acer acquiring Gateway means that Dell has to look over both shoulders at the same time. On one hand, Dell's past mistakes have allowed a focused Hewlett-Packard to regain market share, become the best friend a channel vendor can have and provide a very competitive set of business computers from laptops (running whichever OS you'd like) to scalable data centers bathed in eco green.

And on that other hand, or over the other shoulder if I'm going to continue flogging the analogy, is now Acer. In the United States, Acer was often the largest personal computer vendor you never heard of. Although it did make a few forays into Acer branded products, the Taiwan computer vendor has enjoyed a substantial part of its growth in building computers -- in particular laptops -- for other vendors. The Acer name if far better known outside the United States.

Along the way Acer has grown to be neck and neck with Lenovo to claim the No. 3 slot as the world's largest vendor. The Gateway acquisition should put them into a few percentage points ahead of Lenovo. By gaining the Gateway name (as well as the Packard Bell name, by the way), Acer gets to take a strong run at the U.S. market at a time when the market is in flux.

Here is the Acer P.R. speak on the $710 million acquisition:

"This strategic transaction is an important milestone in Acer's long history," said J.T. Wang, chairman of Acer. "The acquisition of Gateway and its strong brand immediately completes Acer's global footprint, by strengthening our U.S. presence. This will be an excellent addition to Acer's already strong positions in Europe and Asia. Upon acquiring Gateway, we will further solidify our position as No. 3 PC vendor globally."

Gianfranco Lanci, president of Acer, added, "Both Acer's and Gateway's geographical presences and product positioning are highly complementary. We believe that our combined scale will lead to significant efficiencies. Gateway has built one of the industry's most powerful and unique brands and with this acquisition, we will have the opportunity to implement an effective multi-brand strategy and cover all the major market segments. In time, we intend to actively manage our brand portfolio and differentiate our brands to address different consumer segments. We are also acquiring a world-class team and Gateway's employees will be critical to our combined success." "

So now you have Hewlett-Packard, Dell, Lenovo and Acer as the main contenders in the PC business both worldwide and in the United States. Does anyone really need to see how important a global footprint has become for success in selling computers and laptops?

The Acer acquisition is good news for computer buyers in the United States. They will now have one more company that is substantial, embraces innovation and understands the channel to consider when they are purchasing new systems. I haven't forgotten Apple, which continues to be my recommendation for someone wanting to buy a laptop that costs a few more dollars on the front end, but will save you a lot of help desk calls on the back end.

Gateway in its prime was a fresh breeze (although with its cow spot motif, I suppose fresh breeze is the wrong term). The company emphasized its mid-America values and its pony-tailed founder Ted Waite was both a media star with his cow-themed commercials and provided a human touch to a world of bits and bytes, speeds and feeds marketing.

Dell has some serious shoulder swiveling to do in order to stay ahead of this bunch.

Update: here is the status on Packard Bell Gateway earlier announced that it intends to exercise its Right of First Refusal to acquire from Lap Shun (John) Hui, all of the shares of PB Holding Company,, the parent company for Packard Bell BV - a leading European PC vendor based in France. In addition, Gateway is currently in discussions with a third party with regards to a sale of its U.S. based Professional business.

Update: I did a blog on the U.S. tech industry getting caught in the squeeze between China and India. |

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