Acer CEO's 'think twice' Surface warning to Microsoft laughable

Acer CEO's 'think twice' Surface warning to Microsoft laughable

Summary: Acer warns Microsoft that the Surface will disrupt the PC ecosystem. Perhaps the ecosystem needs some disruption.

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Acer CEO JT Wang said that Microsoft needs to think twice about launching its Surface tablet because it'll rattle the ecosystem and partners could become rivals.

In an interview in the Financial Times, Wang said:

We have said [to Microsoft] think it over. Think twice. It will create a huge negative impact for the ecosystem and other brands may take a negative reaction. It is not something you are good at so please think twice.

The comments made me chuckle on a few counts. To wit:

  • First, Microsoft wouldn't have cooked up the Surface if partners were pushing the design envelope. Let's face it, the PC industry's idea of design is to see what Apple cooks up and then copy it.
  • Second, Acer is largely stuck with Microsoft at least for laptops and PCs. In other words, Acer can whine, but has little leverage for anything else.
  • And third, Microsoft's Surface tablet isn't likely to be a threat to the PC ecosystem. Yes, Microsoft has acknowledged the risk of competing with OEMs, but it's a move the company has to make.

In addition, Wang needs Windows 8 to sell ultrabooks and help Acer grow again. Acer's first quarter earnings presentation highlighted how important Windows 8 will be. All Acer has to do is deliver compelling hardware designs---Surface or not.

Related: Microsoft's Surface strategy may force us to find another platform, says Acer | Bott: Microsoft's radical new business plan is hidden in plain sight | Microsoft Surface will be a real iPad rival in the enterprise, say CIOs | The competitive 'problem' in the tablet market isn't the OEM business model | Microsoft and OEMs: New game, new rules | Debate: Did Microsoft throw users under the bus?

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Topics: Hardware, Laptops, Microsoft, Tablets

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65 comments
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  • But the issue makes it obvious

    that the partners, that already have marginal profit, are not going to make any at all with MS.

    And it makes it obvious that MS could crush them on a whim.

    The only available alternative that restores their profit margins would Linux distributions and/or Android.

    And a future possibility with ReactOS.
    jessepollard
    • @jesspollard

      How, precisely, will Acer make profit by installing a desktop OS that costs no money, few customers want and which will require significant support?

      Every support call that Acer answers costs them money and can eliminate the meager profit they receive thanks to their decision to race all the other OEM's to the bottom.

      The history of net books should be a stark reminder of what could happen if they abandon Windows for Linux.
      bitcrazed
      • no - netbooks was a history of MS underbidding

        MS even had to take an OS out of mothballs to do it.

        And then there is the issue of raising prices on OEM licenses for PCs.
        jessepollard
        • No thats not what happened. That fact was that users preferred a 7 year old

          version of windows over the latest great linux. In droves. Linux was free, there's no undercutting that. xp was not free. then all netbooks moved W7, also not free. And surface doesnt change oem profit margins at all. zero impact.
          Johnny Vegas
          • Actually Crapware Makes XP "Cheaper"

            With Windows XP, OEMs can include crapware on their computers, which they get paid to do. When the OEMs were using Linux, their was less crapware available to put on it. This can offset the cost of a really cheap XP license and make it just as cheap as Linux (if not cheaper). Of course, if Linux were more common as a pre-install, there would probably eventually be plenty of crapware for it as well.

            Also, Microsoft was in a position to put pressure on OEMs to use Windows XP, so that helped too.

            Customers, of course, were happy to take Windows netbooks because they were already familiar with XP (and they could run the software they already had). I wouldn't be surprised if, were Microsoft to start selling XP again with five years of support, it would sell pretty well now just for that reason.
            CFWhitman
      • OS X Anyone?

        Simple, roll your own highly prorietary Unix flavored OS much as Apple has done. It might take a year or three, but quite doable.
        Couldless
    • @jessepollard

      Ok, so let's see Acer put it's money where it's mouth is: abandon Windows and sell PCs with only Linux prinstalled. Let's see what happens to its business.
      bitcrazed
  • Acer CEO's 'think twice' Surface warning to Microsoft laughable

    "Let's face it, the PC industry's idea of design is to see what Apple cooks up and then copy it."
    Let's not face it since this statement is wrong.

    Going back to the issue here, Acer is in no position to warn Microsoft. They have to stay friends/partners with Microsoft or risk losing their entire business. They have no one else to partner with. Linux is out of the question on PCs. Too much malware with android. Apple builds their own systems. The last time I used an Acer was over 10 years ago and it was a very cheaply made notebook. They either need to step up their game and build some high quality well designed products or risk going out of business.
    Loverock Davidson-
    • "Acer is in no position to warn Microsoft"

      No, of course. Acer just *must* continue paying money to Microsoft to license their software?

      Ever heard "The customer is the king?"
      danbi
      • Yes I have

        I'm the customer and I want Microsoft Windows, therefore Acer needs to continue to sell Microsoft Windows on their hardware. Acer is in a bind, they can't go anywhere else and they know it.
        Loverock Davidson-
  • funny you asked that

    I meant to point out, that Acer is a customer of Microsoft.

    So you believe Microsoft's customers need to be tormented? Or what was your point?

    Of course, Acer, the Microsoft customer has every right to want Microsoft, the supplier, that they are going the wrong direction.

    Do you still think otherwise? Or you felt compelled to attack my post because I often do not share your "Microsoft-uber-alles" opinion?
    danbi
    • You're being a little sensitive, danbi.

      "Do you still think otherwise? Or you felt compelled to attack my post because I often do not share your "Microsoft-uber-alles" opinion?"

      I was challenging you on your "customer is king" stance - if you think questioning an argument is somehow an attack on you personally, then you really need some emotional help. Sorry, I can't help you with that, I'm afraid.

      Judging by this recent response, you seem to think Microsoft's ultimate customer is the OEM, when in fact, their ultimate customer is.. well.. the customer.. It doesn't matter if Acer thinks Linux or FreeBSD or even OS/2 is the cat's meow - if the ultimate customer doesn't want any of those things, Acer doesn't really have much flexibility, do they?

      Microsoft isn't in the business of satisfying Acer, or Lenovo, or HP, or Dell, other than to provide an operating system that these companies can include with their systems that their customers want to use. It doesn't matter if Acer thinks the new Windows interface is fun or easy to use, only that the ultimate customer wants it, and it works with their hardware.

      "Of course, Acer, the Microsoft customer has every right to want Microsoft, the supplier, that they are going the wrong direction."

      Sure, but they did so by flailing their arms in the air and announcing to the world that they are taking their ball and going home. Acer knows that Microsoft's move is in the best interest of Microsoft and Microsoft's customers, which is why most of Acer's announcement is all about how Microsoft is screwing their OEM ecosystem, rather than doing a disservice to their customers.
      daftkey
      • OEMs role

        So, you still believe it is Microsoft's right to use and abuse the OEMs as they please?

        In my book, the customer is the party that pays. If the OEMS is paying Microsoft for the "privilege" to ship Windows with their hardware kit, then in this case th customer of Microsoft is the OEM. The customer of the OEM is the end user.
        It is also no surprise, that Microsoft refers end users to the OEM for any support.

        So which is it? Are we observing double standards here?

        P.S. Don't worry about my mental health.
        danbi
        • @danbi

          Abuse the OEM's? Seriously?

          These same OEM's who are ALL shipping products running Android/Linux?

          The worlds biggest OEM who announced that it was abandoning its PC business?

          These same OEM's who continued to manufacture cheap, plastic, poor quality hardware and race one another to the bottom of the market whilst Apple ate their lunch for them?

          The OEM's have proven one thing: they are not to be trusted to be good hardware partners and that many of them are technically and aesthetically bankrupt.

          Thank goodness Microsoft has the balls to challenge the industry and reset expectations of what a PC should look like and what it can do.
          bitcrazed
          • Microsoft's pipe dreams

            @bitcrazed,

            So, you believe once an OEM ships Windows, they should not touch any other OS, ever?

            Wasn't this precisely, why Microsoft was convicted criminal of abusing their OEMs? Wasn't this something they agreed to not do ever again?

            All your rant "proves" is the OEM system is ill devised to begin with. But, any of this didn't prevent Microsoft from extracting billions from those same OEMs. Nor did it prevent Intel.

            Both Microsoft and Intel just woke up to discover, their slaves are about to run somewhere else.

            Make no mistake -- all this will be very painful process for the OEMs. To some extent - for their customers too. But so happens during times of revolution.

            And no, I don't blame Microsoft, that all those OEMs were so stupid, they didn't look for alternatives to Windows until now. I mean, serious alternatives: their very own UNIX OSes -- not something prepackaged like Red Had, which is no different than Windows in this case. Microsoft just abused the situation, to their own fail at the end.

            I wonder, if Microsoft didn't trust their OEMs so far, where are their very own PCs?
            This song, "OEMs are why we failed with the PC" is very new. It's today's tune.

            Truth is, they *both* failed, because IBM decided to abandon the party and let Apple have their show.
            danbi
          • What in the world are you even saying?

            @danbi: Look, it doesn't MATTER what alternatives to windows are available to the OEM's because if the CUSTOMERS don't want it then there's no point in producing it! It sounds to me like you have some sort of bias / bitterness towards Microsoft that you're willing to just spew nonsense in the defense of ONE OEM that's crying about the Surface. Change happens, and if something can't evolve then it should very well die off. Trust me, the OEM's that are doing just fine aren't crying about Surface. Acer has a long history of poorly made products and now it's nipping as their butts.

            So PLEASE spare us the 12 year old argument about how Microsoft is "abusing" their OEM's. I applaud Microsoft for setting an example of how to showcase THEIR product. The only other theory I have about your defense of Acer is that perhaps you are an employee there.
            Chonburi Sam
  • Agreed

    Acer needs to develop compelling hardware, plain and simple. Microsoft's plan with the Surface is exactly where the company needs to go right now. If Windows 8 is to be a huge success, there needs to be flagship hardware to run it. Microsoft's hardware will push other manufacturers to push the envelopes on their devices and what Windows 8 can do.
    jhnnybgood
    • Microsoft's plan with the Surface is exactly where the company needs to go

      It is with great pleasure how I look at Microsoft finally getting into personal computers. After exploiting for decades the lucrative niche IBM has built for them.

      But, Microsoft has spoken....


      Even a fool, when he holdeth his peace, is counted wise: and he that shutteth his lips is esteemed a man of understanding. -- Bible, 'Proverbs' 17:28.


      Modern day translation:

      It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt.-- Mark Twain (1835-1910)
      danbi
  • No yours are!

    No Larry your post on acers comments are laughable! When you run a company operating on razor thing margins you can't just hire a team of designers to design a product that will only net you a certain amount of profits back. Just ask Sony how much profit they get on their vaio pcs? Fact is, if I owned a company and the same guy who supplies my inventory all of the sudden starts selling the same thing I'm selling guess what? I'd be pissed too. Not only is it gonna cost me a crapload more to sell my products than him but Because of the nature of the business I'm forced to get my inventory from him. If I wanna stay in business. I own a "me too" acer laptop as you call it. Yes it's cheap and it looks like other products. But for the price I paid for it, it's an amazing bang for my buck. I love the hell out of it. I didn't have to pay the apple premium price to get a product that quite frankly enables to me to do almost anything I can do on those wonderfully designed beautiful products you all seem to go gaga for. Just my two cents!
    wolfn11
    • MS is not to blame for acer profit margins. They license windows at a very

      fair price. Same to everyone else. There's a lot of room between acer and apples margins and acer could make more compelling hw that would sell at higher margins. They choose not to. They choose to offer low end stuf that people will only pay minimal margins for. They could make a tablet better than the surface and charge less for it and still have higher margins than they do now. I was hoping they would. Now I see theyd rather cry than compete so Im not optimistic.
      Johnny Vegas