Interview by Patrick Avenell

Acer this week announced it secured the #1 market share position, at 20.92 per cent, in the Portable PC market for the fourth quarter of 2011, with 225,521 shipments, according to IDC.

We spoke to Acer product management director Nigel Gore about this achievement, as well as the PC market in general, Acer’s tablet and smartphone businesses, and what the future holds.

What did Acer do to take top spot during this period?

Our overall go-to-market strategy is based in retail and commercial segments, so we don’t have a single strength segment. We were very successful in some commercial bids, particularly in the education space. One bid was Queensland tender for about 65,000 notebooks. That’s an 11.6-inch platform embedded with Telstra 3G data connection. That gives kids basically 24/7 access to the net.

Governments change – are you at all concerned about the security of that contract?

The product speaks for itself. It depends on the Department’s wish to continue with delivering devices to students. It’s clear from the Gillard Government that they see investing in this as a benefit. I don’t see why they would have only one session of it and other students wouldn’t get the benefit of that. I think our product is tried and tested, but it’s a competitive landscape and we’ll move our new designs into the next stages.

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What percentage of your PC sales was sold at retail level?

Typically, it’s about a 60 per cent mix between retail and commercial sales. There’s a lot of small office and home office customers that buy from retail, so that can look like it’s coming out of the consumer set because they are purchasing from a retailer.

What’s the retail landscape like for PC manufacturers?

Soft at the moment. It’s definitely softer than we’ve experienced, and I think it’s a sentiment overall for retail across the market. If you look at all the news coming out of retail, electronics has been hit across the board similar to other categories.

What do you attribute the softness to?

The overall state of the economy — consumers are not spending as much as they normally would. There are a lot of bargains out there as well, so people are very reserved about what they are going to spend. Consumers have seen a lot of hot offers — 50 per cent off specials — and those do have a numbing affect on consumers because they also bring forward a lot of purchase cycles, and what happens is you have deflation in the overall revenue contribution from those products as the average selling prices start to dip. All the units we’re seeing are actually up, but when you look at it from a unit perspective, the overall dollar value is depreciation.

You’re saying units went up but value went down?

That’s across the board, yes.

That must be a concern for you?

Of course it is — it’s concern for a lot of vendors out there. The average value decline is around 10 per cent year-on-year, but you’re seeing in certain segments that it’s accelerated.

If you look at the market now days; if you look at the value shares and you look at the contribution; more than 70 per cent of notebook purchases, in terms of units, are below about $900.

What sort of products and technology can we expect from Acer this year?

Ultrabooks are still going to be a big thing for us. The biggest benefit we are seeing around Ultrabooks is speed of response times: to connect to a network as well as the boot time.

We’ve had some great success with our S3 We came out really fast with that in Q4 (2011), and we’ve had great success, and we’re actually able to get to a new pricepoint — about $999 for our Ultrabook, which was awesome coming into December.

Now we know a 13-inch product will only meet certain customer segments because a big sector in the consumer space, and obviously commercial as well, is looking at 15-inch form factors, so we’re bringing to market, within the Q2 (2012) period, our 15-inch products, and that will continue to roll out and I see that strengthening.

Overall share for those products is only going to be about 10-12 per cent within these Q1 and Q2 periods (2012), but by Q3 it will contribute about 20 per cent of our overall product share, as we start getting bigger form factors.

We’ve got an awesome new S5 product coming in the June timeframe, which is also an Ultrabook.

(Interview continues beneath image.)

Acer's new S5, which will be released by the end of Q2 2012.

Acer was quick to market with its Android tablet — to what do you attribute Acer’s ability to get technology out so fast?

We’re very focused on our speed to market — it’s been in our DNA since I can remember, it’s embedded. We work with strategic OEM (original equipment manufacturer) partners and we also partner very strongly with technology leaders, such as Intel, Microsoft and the Android team, so we were able to get the Google code and come out with that really quickly.

Everything we’ve done is very closely aligned and everything is focused on speed and to make sure we can be a very agile, nimble business.

Are we going to see anymore Acer smartphones this year?

In Australia? No. We know that within the smartphone market, you’ve got to really work closely with the telco operators and that space is very crowded. There’s a lot of consolidation going on at this moment in time, so at this stage we’re taking the approach of making it successful in other regions before we bring it back into Australia.

So you could come back at some stage?

There is product available. We’re seeing an overall strategy to remove the complexity from the business. We initially came with a lot of different models and what we found was there was typically only one or two models that telcos or consumers were interested in.

So the R&D teams need to focus on ‘what are those one or two models?’ instead of bringing to the market six. That’s what Apple does well. They’re really focused on their model SKU (stock keeping unit) count — they do a really good job of that — and that means through their entire business they’ve got great economies of scale and great end-to-end supply chain capabilities, and that’s what we need to make sure we’re focused on as well.