DUBAI: It’s tough to think of the PC as a commodity, like a refrigerator. But although the word “personal” is in its name, there’s nothing really personal about PCs anymore. They are manufactured by the millions, with the same configurations and specifications. It’s what people do with the hardware that becomes personal and not the machines themselves.
PCs come in two main categories — desktop and mobile. It used to be that the world bought desktop machines. Times have changed though and now mobile computers are where future growth lies. Except for specific high performance machines used by gamers and graphic designers, both businesses and consumers are increasingly turning to mobile computers. Mobile PCs are not just notebooks. Particularly in the last year netbooks and mobile Internet devices have garnered a lot of attention and sales. According to Gartner, 10 million netbooks were shipped in 2008 and 25 million will be shipped in 2009.
One company that has long been aware of the increasing importance of mobility and targeting specific products to specific customers is Acer. According to the worldwide market data released by analyst firm IDC, Acer reached the first position in the Europe Middle East and Africa (EMEA) PC market (Desk-based PC and Mobile-PCs) in the 3Q 2008, coming in first for the first time.
Acer accounted for 21.3 percent of all shipments in the EMEA region recording a gap of more than 2.6 percent from the vendor ranked in second spot. According to IDC data, PC shipments in EMEA totaled over 27.8 million units in 3Q 2008, with a 27 percent increase YOY. IDC’s preliminary results show Acer’s strong performance in the EMEA market with a YOY growth of 90.2 percent.
The EMEA PC market performance was driven by strong demand on notebook solutions. Additionally, the introduction of new Mini Notebooks or netbooks, produced significant movement in the top five vendor positions. Acer’s strong focus on mobile products and mobility enabled the company to act quickly in the Mini Notebook segment with the launch of the Aspire One and this led to robust growth in the EMEA region.
“Globally, PC market growth is driven by end-users demand for mobile products and mobility has always been Acer’s focus,” commented Gianfranco Lanci, CEO and President Acer Inc. “The results we have achieved confirm that not only our investments in both R&D and Marketing have provided us with a solid base for growth, but also that the Multi-Brand strategy is tactical both in terms of business and market positioning and this result confirms the accomplishment of it.”
Acer’s popular mobile products are helping the company grow new customer segments. For example, telecoms are key drivers of the uptake in netbooks. Fully one-third of all netbooks are shipped to telecom companies who provide them as part of package deals to consumers.
“In Europe, telecoms are really pulling us. They are using netbooks to get consumers to use the Internet more,” said Emanuele Accolla, VP Acer EMEA and Managing Director. “First of all, telecoms promise you the Internet. You pay 20 euros per month for two years. That’s about 500 euros. They bundle a volume of bandwidth within that price and on a very simplistic analysis it looks like they are just trying to make a little money and that’s it. But that’s too simplistic because once you are into the Internet you get hooked to buy additional services and content from the company. So they really make a lot of money. It’s all about competition in Europe.”
He added, “In the Middle East, there is some minor activity starting with the telecoms but it’s not like we see in other regions. The monopolistic attitude is too prevalent here. Telecoms are still too comfortable in bringing in profits. But the opportunity with these small devices is there.”
Acer is doing very well in the region but there are new competitors and established ones are making new moves all the time. Samsung Electronics has become a new player in the Saudi Arabian and UAE notebook market. Their product line-up includes notebooks in four different categories — Premium Thin & Light, Mobile Optimum, Business, Desktop Replacement, and also the Netbook segment. How does Accolla perceive the new competition?
“A year ago or so Dell announced that they were going to play strongly in retail in Saudi Arabia. You can see the results today. We now sell many more notebooks than they do,” he remarked. “The reason is that we do our job better than they do their job in this specific consumer area. We will continue to do our job even with Samsung in the market and I think we know how to do our job well. I hope they will be successful. Competitors always stimulate the market. I would like to point out that we won’t be selling any DVD players or TVs. Acer prefers to concentrate on what we do best.”
IDC’s numbers show that Acer is a PC manufacturing giant, the market leader in 10 countries in EMEA. But the Kingdom isn’t one of those countries and Accolla indicated that his team has made changes in the Saudi channel which they hope will bring improved market share.
“We have made some changes that we believe will help us achieve the number one position in the Saudi Market. We have a worldwide strategy that is becoming evident with time. Years ago we identified that a Multi-Brand strategy was necessary in this industry. As a company we made changes to enable us to go towards that direction — to separate the professional products from consumer products for example,” stated Accolla.
Acer now owns and promotes several different brands including eMachines, Gateway and Packard Bell.
“The main reason for our success in the Middle East is that when I came in 2002, I had it clear in my mind the strategy of Acer and I pushed all our people to understand this strategy and share it with our channel partners,” Accolla continued. “We had problems with the channel in Saudi because those in the channel told us that Saudi Arabia was different and Acer’s strategy was incorrect and the Acer channel in Saudi Arabia would play by a different strategy. In the end I decided that we had to play by different channels. When you are 90 percent or so depending on one channel and you make a big move like that, it’s something that needs more than a few months to implement successfully.”
The company has now appointed new channel partners and Accolla said that for the future the positioning of Acer’s products in the Saudi market will be similar to what is already standard in other geographies. The eMachines brand will be used with those products that are entry level only, focusing on value for money. The Packard Bell brand will be for specialty consumer use. The Acer brand will target middle to high end consumers and there is also Acer Professional which is managed differently than other Acer products.
“The bottom line for us is that we have to be sure that the end customer who is buying an Acer computer is having a good experience,” Accolla said. “To that end in Saudi Arabia we have started a call center. We do check that our local service providers are delivering a level of service to the Saudi market as per Acer’s global requirements. Customer satisfaction is key to our success. The fact that our market share continues to grow is proof that we are providing quality products coupled with brand value.”