The future of Acer

EXCLUSIVE: Gianfranco Lanci, president of Acer, talks to about the Middle East, solid state drives and the future of mobile devices
The future of Acer
By Quintin Smith
Tue 15 Apr 2008 01:12 PM

Gianfranco Lanci, president of Acer, spoke exclusively to about the Middle East, solid state drives and the future of mobile devices.

You currently a very strong position in the notebook market in the Middle East. What are you going to do in 2008 to keep that position?

I think one important thing is that we'll continue to grow in countries where there's growth, like Turkey and so on, but also we need to carefully watch countries that will have potential in the future.

I think our strength in the Middle East is that we started working here six years ago, when the Middle East was still relatively small in terms of market. But we'd seen a good opportunity. In most of the emerging markets across the world we have a strong presence, simply because we started before the competition.

What are you going to do to advance your market share in the US and replicate the success you've had in the Middle East and Europe?

In Europe we're already number one. We have more than 20% of the market share. So I think Europe and the Middle East are two very good examples of success. And in the US, with the acquisition of Gateway, we're now number 3, which is a big jump because we were number 5 or 6 before. We're now in the range of 10% market share, within the range of Dell and HP, and that's a first for a non-US company.

Do you feel that not being a US company is a hindrance for you?

I would say wherever you go, local companies always have an advantage against foreign companies.

But in the US our integration with Packard Bell is going very nicely- it's going to be completed by Q2. And our results in Q1 have been very, very good, so the integration is working. At present in the US things are going very differently for us than they were six or nine months ago.

Can we expect more investment from Acer into solid-state hard drives for laptops instead of spinning drives?

Solid state drives are something that we need to understand in terms of price, and how much they're going to cost per gigabyte. Today my opinion is that they're still relatively expensive. They're a good solution when you think of a light, small notebook, but for a traditional fifteen inch, 3kg notebook they're still too expensive.

So it's the price that's an issue as opposed to their rumoured reliability issues?

Reliability can be fixed. In my opinion the cost is much more important. Of course reliability is important but I'm not afraid of technology's ability to fix this kind of problem. The most important factor with a notebook is for it to have a decent price.

What branding are we going to see in the Middle East region in 2008?

Well, we have the Olympics but they're not until 2009. Then we have Ferrari and we'll continue to sponsor Ferrari. And we have Yamaha's MotoGP team. We're going to continue this approach, and we're going to increase brand awareness of Gateway, Packard Bell and Acer through traditional advertising as well.

But I think the Olympics is going to be a big opportunity for us in terms of branding, though we can only start working on that in 2009. Then we have the Vancouver Winter Olympics in 2010 and London in 2012.

You use the Ferrari notebook to test new technologies- is there anything currently being used in the Ferrari notebook that we can expect to see more of in the future?

The Ferrari notebook is one of the first ever notebooks with carbon fiber housing, but carbon fiber is still too expensive. Unfortunately it's a very good solution, but it's still too expensive. There's a shortage on carbon fiber worldwide because many airplane manufacturers want it. And you can imagine how much carbon fiber airplanes consume compared to a small notebook! So there is not enough capacity for carbon fiber in the world today.

How will your mobile device use in emerging countries differ in the future?

Mobile internet devices. Not small, low-cost notebooks, but mobile devices. Potentially these will be very important in the future. If you take handheld devices today they're already as important as notebooks, and we're talking about 300 million units by 2010 or 2011.

But there needs to be the right technology. Today technology has some limitations. If you talk about mobile travel devices you need them to have power, but you also need low consumption because you can't have a big battery. And then you also need a good communications infrastructure, because if you can't be easily connected for an affordable price this is a big limitation. But I think this segment is going to be huge in the future.

Many laptop manufacturers are now working to build small, cut-price highly mobile laptops. How's Acer responding to the pressure to keep up with these devices?

In the future we'll see a lot of people coming out with these small internet notebooks, but I think that'll happen later, throughout Q2 and Q3. There are a lot of people talking and I think they're going to become a big segment of the market, and we're working on that, but today we don't feel any pressure simply because of the fact that there's no competition. The quantity of these devices you see available on the market today is very, very small.

We want to be a major player when the quantity of these devices in the market is big, but we're talking about the second half of the year there, not the first half.

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