Acer-Gateway merger puts Lenovo under pressure

dorisxiaowei

Once Acer completes its $710 million-buyout deal for Gateway, the Taiwan company would become the third-largest computer maker in the United States, raising the competitive pressure in the consumer market against the top three PC vendors Hewlett-Packard (HP), Dell and Lenovo.
Lenovo would be the first to feel the heat if the recently announced deal goes through as planned in December. Besides threatening to push Lenovo to fourth in the global market, the Acer-Gateway agreement could kill Lenovo's talks to buy Netherlands-based Packard Bell, which the China company wanted to get a bigger presence in the global consumer market.
Gateway owns all of the shares of Packard Bell parent company PB Holding, and has said in a separate statement that it "intends to exercise its right of first refusal" to acquire all the shares of PB Holding, an indication that Packard Bell could become a part of the combined company. Packard Bell "was a particular plum for Lenovo because they wanted to move past business and to consumer or at least the prosumer market," Leslie Fiering, analyst for Gartner, told InformationWeek. "The fit for Lenovo was very good."
Battle for third
The Acer-Gateway deal also would double Acer's market share in the United States, making it the clear No. 3 computer maker. In Q2, Gateway was third behind Dell and HP, with 5.6 percent of PC shipments, according to IDC. Acer was sixth with 5.2 percent of the market.
Globally, Lenovo and Acer have been battling hard for third place over the last two quarters. Acer took the position from Lenovo in Q1, giving it back to the China company in Q2, according to Gartner. Nevertheless, Acer had a very strong Q2, recording more than a 54 percent increase in shipments y-on-y—the biggest increase among the five top vendors.
Through Gateway, Acer, which intends to continue the Gateway brand, also gets a place in U.S. retail company Best Buy, strengthening Acer's sales channel in the consumer market. In general, Lenovo hasn't been as successful as Acer in developing its consumer sales channels. "Outside of China, they have had trouble coming up with a meaningful, consistent strategy," Fiering said.
The heated competition between Acer and Lenovo highlights the rise of computer brands owned by Asian companies, which in the past made computers for other vendors. The current market reflects how they've moved from manufacturing to branding, marketing, and sales. "It becomes a little bit of Taiwan versus China," said J.P. Gownder, analyst for Forrester Research. "It moves them up the value chain a bit."
Market pressure
Nevertheless, whether it's Lenovo or Acer in the third slot in the global market, the companies will remain far behind the top two players HP and Dell, which together accounted for more than 35 percent of all PC shipments in Q2, according to IDC. Lenovo and Acer, which were third and fourth, respectively, had a combined total of 15.5 percent.
By gobbling Gateway, however, Acer would create a business with $15 billion in sales, and 20 million PC shipments a year. Such a company would be in a position to put pressure on HP and Dell, particularly in the consumer market where Dell is suffering from lagging sales. "They could put a world of hurt on the consumer market, which is where Dell is vulnerable and where HP is very strong right now," Fiering said.
Gownder, however, believes Acer won't be a strong threat for a while. The acquisition "puts them in a reasonable position to challenge HP and Dell, but that's some years down the line," he said.
At least one analyst has downplayed the impact the acquisition would have on the top two players and the business computer market in general. Analyst Jack Gold of J. Gold Associates said Acer and Gateway are primarily consumer brands with little presence in the corporate market, which is where margins are higher and where higher-end notebooks, an increasingly important share of the PC market, are sold.
"We do not believe that much will change in the overall PC market," Gold said in an e-mail. "Acer does bring lots of manufacturing muscle to the table, but the Gateway brand will remain and be primarily targeted at budget conscious consumers. It has minimal impact on the business user market."

yszhuzhu

[em12]

google

Good news!
Acer adn Lenovo are both china's famous company[em02]

Ivan860755

i more like lenovo!