In a recent interview with Nikkei Electronics Asia, Acer CEO Gianfranco Lanci made the case that the company has seen dramatic success in the PC market because it abandoned direct sales.
Acer has a huge market presence in Europe and Russia and has focused on market share over profitability, with an operating profit of just 2-3 percent, according to analyst firm Gartner. Thus far it's worked; Acer's global PC market share hit 21 percent in Q3 2009, just 1 percent behind HP and a percent or two above Dell.
Shocked? Me too.
Because PCs are commodities, Lanci argues that brand recognition and exterior styling are the most important factors for consumers. And obviously the products have to work well enough for consumers to continue to buy them. In fact, Lanci has used a similar argument in the past to suggest that "U.S. computer brands may disappear over the next 20 years, just like what happened to U.S. television brands."
Whether or not Lanci is correct, most observers agree that PCs and servers have become commodities. To some extent it's surprising to see Acer's "good enough" hardware make such large gains. This may be because the markets that are buying Acer products have less PC history, and newer machines are dramatically better than the computers and servers of 10 years ago.
In complete contrast, Oracle, with its newly acquired Sun hardware business, announced last week that it would go in the opposite direction and start selling direct in order to gain back the profit margin lost to VARs. … Read more