Wednesday, 5 September 2007

Acer CEO Insists Gateway Acquisition Good

The iconic Taiwanese computer maker Acer might have scored a browny point over its Mainland Chinese rival Lenovo by acquiring ailing American computer maker Gateway, but the world and investors are not quite happy with this acquisition. Investors have punished the company and its shares have fallen, but the CEO of the company says Gateway acquisition is good and will be beneficial in the long run.

People in the know say the company is over paying for acquiring Gateway, and also say it will have difficulty integrating the American company. However CEO Wang Jen Tang said Gateway would help Acer improve its margins and market share in US, the world’s largest and most competitive computer market.

Acer is a popular company in Asia however when it comes to US, it’s the domestic companies such as HP, Compaq and Dell that are highly regarded. The Gateway acquisition is Acer’s second attempt at cracking the American market. At first attempt, in the mid and late 90s, Acer tried to sell its brand to Americans however it withdrew from the American market altogether as sales were simply not improving. Even now, Acer doesn't have strong brand recognition in the US and Tang is hoping that the Gateway and eMachines brands will allow the company to lift its net margin in the US into the 2-3 per cent range.