strategy change in the PC industry

[benzslrpee]

i'm pretty shocked by Acer's recent announcement. this is the first time i've heard a pc manufacturer switch from differentiating on price to product value... an Asian firm too! my ancestors must be rolling in their graves all jesting aside, a 1.5% - 2% operating margin is pretty bad. a slight hiccup in their operating expenses will give them negative cashflow.

the only high(er) margin product i can think of in the PC space right now is Lenovo, but they had the advantage of taking over a highly regarded and successful product line from IBM. i wonder how Acer will approach re-branding their company that has largely been known for making cheap laptops.

[maflynn]

Look what happened to Dell when they focused on volume at the expense of their profit margin.

I can't say Acer will be successful, but they probably can't have too much of a positive long term view with a diminishing profit margin

[*LTD*]

Oh, good.

So they're going to adopt a vertical business model and make their own hardware locked to their software, that will be targeted toward providing a superior user experience.

Smart move. Finally!

[zap2]

I will be interested in how this works out. Clearly Acer is not a software company, so using that to separate themselves would be a tricky move. (and I'm not talking OS change to an in house project, I'm talkings skins or apps for Android or Windows)

Top quality hardware with new and interesting form factors could help. I don't think they are moving to vertical business mode, as they will likely still use Windows and Android for their devices.


I'll be interested to see where this takes them. If this means they won't be selling any low end product in a few years, I see that as bad, because I don
't think they will do it as well as Apple.(who does sell low end products, but not really low end prices). But slightly thicker profit margins with bit high price on devices with improved quality could work.


As for the claim that Dell is all about volume, I disagree to some extent, admittedly they make their money by sell cheap devices. But things like the Streak 5 and Streak 7 aren't cheap devices nor are their smartphones.

[KingCrimson]

Originally Posted by zap2

As for the claim that Dell is all about volume, I disagree to some extent, admittedly they make their money by sell cheap devices. But things like the Streak 5 and Streak 7 aren't cheap devices nor are their smartphones.

Yeah but Dell isn't selling 10 million Streak devices per quarter.