Converge and conquer
One of the big PC industry success stories of recent years has been Taiwanese OEM Acer.
Recently, IDC revealed a year-on-year increase in PC sales of over 25 percent for Acer - far exceeding its competitors and elevating it to the global number two spot (replacing Dell) for the first time.
However, all this growth has come at a cost. Through an obsessive attention to reducing its own costs, Acer has managed to drive the lowest price of a PC down to a level that few other OEMs can compete with. The problem is that this has inevitably led to a commoditisation of entry-level PCs, with consumers demanding ever more for ever less.
At the same time we've seen a boom in demand for netbooks - a further indication that the mass market is attracted by low prices and portability over performance - and the convergence of the PC and telco segments as smartphones start to increasingly mimic PCs in terms of functionality.
So, if Acer's strategy was just to dominate this volume PC market, there would be a real danger of it running out of both growth and margin before long, which is why it makes sense for Acer to focus its attention on the smartphone market - which is expected to be one of the major growth drivers in the tech industry for the immediate future at least.
But being able to make and sell a lot of notebooks and netbooks doesn't necessarily qualify Acer to become a smartphone player. Which is why it acquired Taiwanese smartphone maker E-Ten - better known for its Glofiish brand - back in March 2008, and made it into the smart handheld business group.
