Acer Looks To Partners In Targeting Dell

Dirk Olsen, director of U.S. commercial channel sales for Acer, said that despite market share gains in 2006, the San Jose, Calif.-based vendor believes there's still room to grow sales and market share via solution providers.

"We are always trying to push the envelope in terms of growth," Olsen said. "[Last year] we grew our notebook segment 47 percent, overall and distribution revenue grew at 31 percent. And that's an environment where we see U.S. distribution not really growing much at all."

According to IDC, Acer's PC shipments rose almost 38 percent last year, far outpacing rivals like Dell, Hewlett-Packard, Lenovo and Toshiba in raw growth numbers. Acer's global market share in 2006 came in at 5.9 percent, up from 4.7 percent at the end of 2005. Still, Acer's worldwide numbers were stronger than its numbers in the United States, where the company failed to crack the top five in market share.

"We plan to continue with our model, the model we implemented two-and-a-half years ago," Olsen said. "Our model is quite simple. We're working closely with our distribution partners and our VAR community to provide them with very well-spec'd, high-quality products at a very good value."

Like other PC vendors, Acer has begun to increase its presence among online retailers. However, one system builder who competes against Acer said his reseller partners have started to notice pricing disparities between Acer's online retail partners and the prices they get online.

"With resellers not being able to save the customer money, they are forced to decide how to position themselves," said the system builder, who requested anonymity. "I have seen the online partners selling for less than it costs to buy from the authorized distributors to the resellers."

Overall in 2006, average selling prices plummeted from those in the year before. "If you look back at 2005, in overall channel trending, you saw [average selling prices] up in the neighborhood of $1,400 and $1,500," Olsen said. "There was a steady decline going through 2006, and toward the end of 2006, you saw something more in the commercial channel of about $1,250." Meanwhile, he said, consumer retail notebook SKUs dropped from about $1,250 to $750 during that time.

"We see this [space] becoming more interesting for VARs," Olsen said. "[For] the SMB VARs, where they don't have access to programs from HP, Lenovo or Toshiba ... we bundle everything together up front and give them a competitive offer. Most importantly, they can compete against Dell. We are really going head-to-head against Dell in this regard. We provide an SMB VAR with an aggressively spec'd, aggressively priced product and beat Dell. That's kind of what we've been doing, and it seems to be working because we've really been growing in the channel."

That growth has come despite what some believe is its lack of forceful presence and brand awareness in the market. Jeffrey Sherman, president of Warever Computing, a Los Angeles-based solution provider and Acer reseller, said the Acer story comes with good news and bad news.

"The good news is that the sales figures that you see are pretty good," Sherman said. "The bad thing is that they still barely advertise, and there is still a real lack of knowledge of them in the industry. They are not going to get the guy off the street. But they seem to be doing well in the business field."

Sherman said there tends to be little to no direct contact with Acer field representatives. Nevertheless, Acer's reputation of providing quality, competitively priced notebooks has begun to win over customers that had previously done business with Dell, he noted. And that comes in spite of what he believes is Acer's lack of visibility and presence in such situations as special-bid pricing on certain deals.

"It's not that [Acer] is hard to deal with," Sherman said. "There's nobody there to deal with."

Olsen said part of Acer's channel plan for 2007 includes increasing its communication with solution providers. Although that doesn't include adding staff to Acer's channel organization, it does include other measures, he said.

"We're looking at enhancing our communication with VARs, both via distributors and via Acer to engage with them more and provide support and access to better information," he said.