Analysts divided on Acer-Gateway merger in Asia

Industry observers are divided on what this deal will mean for the overall region and how it will impact Chinese PC rival Lenovo.
Written by Lynn Tan @ Redhat, Contributor

Few are disputing that Acer will gain a stronger foothold in the U.S. PC market after it acquires Gateway, but the impact of the merger in Asia appears somewhat unclear.

The Taiwanese PC maker announced Monday that it would purchase American PC maker Gateway for US$710 million.

According IDC, the combined shipments of both companies will put Acer in the No. 3 spot in the global PC market--ahead of its Chinese rival Lenovo

Bryan Ma, IDC's director for Asia-Pacific personal systems research, told ZDNet Asia in a phone interview that Acer's acquisition of Gateway will not have any impact on the Asia-Pacific region as the action is all in the United States.

He said Gateway lacked an Asian presence, "aside from Japan and a very small entry into China".

"As a result, it really doesn't change anything in the region," Ma said. "Right now, Gateway is very small in China, and it still remains to be seen how successful they're going to be."

In terms of sheer numbers, the IDC analyst said that "the volumes that Gateway ships in China today don't even scratch the surface of what someone like Lenovo and Dell are moving over there".

"It's not even a drop in the bucket," Ma added.

Shaun Rein, managing director of China Market Research Group, has a different view.

Rein told ZDNet Asia in a phone interview that the Acer-Gateway merger "is really going to hurt Lenovo" in China and the rest of Asia.

He said Lenovo is floundering with problems of deteriorating product quality, poor distribution networks and customer service in its home turf, which "leaves a great opportunity for Acer to seize market share in China and the rest of Asia".

"[In contrast], Acer understands the needs of local Asian consumers and has pretty good distribution networks," Rein said. "[By] combining Gateway's brand name and Acer's distribution channels and know-how, you've got a really good potential here [to take market share]."

He also noted that with Gateway, Acer will have an opportunity to offer another choice to consumers, and the American brand name can help the Taiwanese PC maker shed its image as an OEM manufacturer for other big brands and raise its profile among Chinese consumers.

Although Gateway is still relatively unknown in Asia, Rein said, the American PC company could piggyback on Acer's local know-how to gain inroads into the region.

Acer's acquisition of Gateway will therefore be "a smart move if they can show consumers the premium quality of their product lines", he noted.

On how the Taiwanese company could do that, Rein offered: "Acer needs to focus on positioning Gateway as a mid- to high-end computer for consumers in Asia.

"They will then fill in the gap left wide open by a floundering Dell and an unfocused Lenovo."

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