Acer sweats as HP acquires Palm

Friday, 30 April 2010, 03:03 Hrs   |    1 Comments
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Acer sweats as HP acquires Palm
Bangalore: World's top PC maker HP has taken over Palm to enter the already crowded smartphone arena. Seeing this, Acer, world's second ranked PC vendor has planned to roll out four new smartphone models to keep its advantage over HP. "Competitive advantage of new products can help us boost profitability from the third quarter," Acer Chairman J.T. Wang told an investor conference even though smartphones make up only a very small amount of Acer's sales now, according to Reuters.

Acer also sees growth in its traditional PC market, forecasting 30 percent annual growth in global laptop shipments over the next two years, though some analysts say a shortage of key components remains a concern and could hurt PC makers' margins in the coming months. "Its second quarter margin might be affected but the impact should be limited. Acer has scale and knows how to control costs very well, and third-quarter sales might be growing faster" said Yuanta Securities analyst Vincent Chen, referring to rising prices of key parts such as memory chips.

For Acer, getting bigger is very important for survival. Acer acquired PC rivals Gateway and Packard-Bell over the past few years, which has dramatically expanded its footprint in the U.S. Acer had a 13.6 percent share in the global PC market in the first quarter, while No.1 HP grabbed nearly 20 percent in the same period, according to IDC.

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