My Conversation With Rudi

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No, not that Rudy, the politician known as America's Mayor who will -- wait for the plug -- be speaking at VARBusiness' VAR500 event this coming June. I'm talking about Rudi Schmidleithner, president of Acer's Pan American operations.

Acer has been staking out a position as the most channel friendly of computer makers and, truth be told, it looks like a winning strategy. While IBM has churned up concerns about stability with the sale of its PC division to China's Lenovo Group, and some other vendors are backpedaling from sales plans that have focused on moving as many boxes as possible -- even if it meant leaving VARs in the lurch -- Schmidleithner tells me that Acer increased its reseller base five-fold in 2004.

This year, Acer is planning to boost its reseller fortunes even further. Schmidleithner hopes to grow the number of notebooks he sells through VARs in North America by two-and-a-half times, with an overall goal of becoming one of the top three notebook vendors in the United States within three years. He also intends to double Acer's desktop sales here in 2005.

In years past, Acer's been something of a mixed bag. The company, which was established in 1976, rose to prominence under the long-time leadership of Stan Shih, who retired at the end of 2004. Over the years, its influence has waxed and waned as it carved out a reputation as a maker of nicely designed machines that were often a small step ahead technologically to make them a better value than competitors' models. However, there were times when the brand wasn't perceived as having all that strong a presence in the United States.

Such impressions are borne out by the numbers. According to market researcher Gartner, the company currently is the No. 5 PC vendor worldwide (after Dell, Hewlett-Packard, IBM and Fujitsu), but doesn't make that top-five cut in the United States. (Interestingly, in Europe, the Middle East and Africa, which accounts for almost one-third of the world's PC market, Acer is No. 3, after HP and Dell.)

In 2005, no computer maker may be better poised for growth in the channel than Acer. While the industry focuses on Lenovo's efforts to get its operations running smoothly, and on HP channel chief John Thompson's implementation of his plan to boost partner satisfaction, Acer intents to quietly move forward. Acer expects its worldwide revenue to reach $9 billion in 2005 -- a 35 percent jump over its 2004 figures. (Operating income is expect to reach $190 million, a whopping 67 percent rise over 2004.)

To help make those numbers, Schmidleithner isn't sitting still. Building on the success he has had since taking charge of Acer's Americas operations in 2003, he's pledging to tune his partner programs, vowing to "become much clearer in communicating what we can do for the channel. There are a lot of VARs who have just discovered, by chance, that we can be a good partner."

Mostly, being a good partner means that Acer is sticking with a channel-only strategy that ensures retailers won't be able to undercut prices offered by VARs. (Some Acer products can be obtained through retail outlets, such as J&R Electronics and TigerDirect, but Acer says they're not sourced directly from the company.)

Acer is also making itself attractive by serving up innovation on the product front. These include the Ferrari 3200, a laptop in a bold, red case that's one of the first mobile offerings to sport AMD's 64-bit Athlon processor, and the Altos G520, an entry level, dual-processor server aimed at VARs targeting the SMB market.

A big factor in Acer's favor is its cost advantage. While its component costs are obviously on par with other vendors, Schmidleithner believes Acer's overhead is much lower than Dell's -- perhaps only half that of the U.S.'s No. 1 computer maker.

"Worldwide, we are strong, but today in the U.S. we are still relatively small," Schmidleithner says. "We need to have the American market to secure our long-term position, our long-term survival."

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