Bangalore: Taiwan-based technology firm Acer Inc., which went past Dell Inc. to become the world’s second largest seller of personal computers (PCs) last year, is hoping to replicate its success in the Indian market.
The local arm of Acer is increasing its range of computer servers in India. It also plans to bundle PCs with servers to boost sales, as well as focus on mobile handsets, LCD (liquid crystal display) monitors and projectors, a senior executive said.
The company became India’s third largest PC vendor in the last two quarters of calendar year 2009, with a 10.4% marketshare, according to an IDC (India) Ltd report released on 19 February.
Analysts predict India’s PC market will expand this year, but say Acer will face stiff competition from rivals such as Hewlett-Packard Co. (HP), Dell and others for market share.
Graphic: Ahmed Raza Khan / Mint
Globally, Acer has become the leader in the fast growing netbook market, and is second placed in the notebook market and the overall PC market—which also includes desktops—since 2009, according to research firm Gartner Inc. It is now within striking distance of market leader HP.
“Earlier the perception was that we were a value-for-money ‘Asian’ brand. Not many people realize that we get 60% of our revenues from the European market and we are increasingly becoming strong in the crucial North American market,” said S. Rajendran, chief marketing officer at the decade-old Acer India.
With three brands, he said, Acer now addressed all segments of the market. While eMachines is for buyers looking for a trusted value offering, Acer itself is positioned as a performance brand.
Gateway in India and North America and Packard Bell in Europe cater to the top end of the market.
The company does not give country specific revenue figures, but industry magazine Dataquest pegged it at Rs1,988 crore in 2008-09.
Sumanta Mukherjee, lead PC analyst of IDC (India), said the domestic PC market contracted by 4-5% in calendar year 2009 to 7.6 million units. But it is expected to grow 14-15% this year.
“Enterprise and SMBs (small and medium businesses) had not grown, leading to negative growth last year. But these segments are showing growth along with renewed buoyancy in the consumer market in the current year. Acer is a very competitive player and it will be a close fight between HP, Dell and Acer—with Lenovo (Group Ltd) also providing stiff competition,” Mukherjee said.
Rajendran said Acer, which was earlier present mainly in the entry-level x86 server market, will now leverage its growing presence in the server space to boost PC sales.
“We also intend to focus on verticals like corporate, SMBs, public sector, education, telecom, etc., where we have started winning deals,” he said.
Pointing out that Acer had a share of 14.9% in the intensely competitive LCD monitors market in India—against market leader LG Electronics India Pvt. Ltd’s 16.1%—Rajendran added: “Servers, monitors, mobile handsets and projectors, along with our established PC business, will accelerate our growth.”
The executive said Acer is focusing on smart phones and aimed to be among the top five handset vendors in India in the next two years.
“In India, currently we have two models—e101, which is an entry-level model, and the hot selling Acer Liquid. The earlier four models we had introduced are being gradually retired,” Rajendran said.
Diptarup Chakraborti, principal research analyst at Gartner, said Acer had grown well in the nettop and notebook categories. But the Indian market, he added, is extremely competitive, with Lenovo, HCL Technologies Ltd and Wipro Technologies Ltd vying for the value segment as well.
“Also, HP and Dell are very strong and established players. In the server market, Acer currently has a footprint only in the lower end of the market. It will be a challenge for them to grow the mid-end of the market, where apart from the likes of HP and Dell, IBM (International Business Machines Corp.) is also a very large player,” he said.
But he added that Acer had shown it could take on established players globally. “The Indian PC and server market. are in for some interesting times,” Chakraborti said.