Possibilities and challenges abound for Acer/Gateway

What will Acer do with its new toy?

Acer’s sudden acquisition of Gateway has set the technology world abuzz with speculation about its implications. Yes, it has enabled it to leapfrog Lenovo as the third largest PC vendor in the world, but what will Acer do to cement and ultimately improve that position?

Gateway’s European sales director, Sarah Shields, spoke exclusively to PC Retail today: "This is a very exciting industry announcement," she said, but added: "I’m looking forward to finding out what happens next." She’s not the only one.

PC Retail also spoke to Michael Megalli, a partner at US brand consultancy Group 1066. "Acer gets two key things from this deal: a foothold in the United States and the right of first refusal on Packard Bell – ahead of Lenovo," he said.

The combination gives Acer 10.8 per cent of the US market, but Megalli thinks it still has a lot to do over there. "Looking at it purely from a brand standpoint, it’s a challenge because neither the Acer or Gateway brands have done much to build a story in the marketplace," he said. "Acer doesn’t really stand for anything in the US and I don’t even think that their name recognition is that high."

"So the challenge for Acer is how is it going to leverage that brand; are they just buying it for the bodies or are they going to try to get some of that brand equity? To be honest Acer hasn’t been a particularly strong marketing company, so it will be interesting to see if they can turn that around a bit."

Shields was reluctant to be drawn on the implications of this deal for the UK market, but she did say: "This will be very worrying for local integrators as it will really stir things up." In other words, the combined Acer and Gateway operations will be even more efficient than ever, further driving down prices in the already fiercely competitive market.

There also remains the very real possibility that Acer/Gateway will exercise its right to buy Packard Bell, which would give it an extremely strong presence in the UK mass merchandiser channel. Interesting times.

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