Acer Preps Smartphone Line

Hoping to boost its profitability and gain a larger share of the hot smartphone market, Acer Thursday announced it will introduce a line of mobile internet devices in the coming months. The devices will all include 3G wireless connectivity and will be able to interact together and share data, said Gianfranco Lanci, CEO and president of Acer, at the company's first-quarter investors' conference. The smartphones will run Acer's shell user interface.

The world's number two PC vendor made the announcement a day after market leader Hewlett-Packard purchased smartphone maker Palm for $1.2 billion. Acer officials also said they expect new laptop PCs will increase its profit margins after posting a 62 percent rise in first-quarter earnings.

Smartphones comprise only a small amount of Acer's sales currently, and analysts say Asian tech firms vying for a stronger foothold in the smartphone market face an uphill battle because of the HP/Palm deal.

Acer, though, has decided to "really put the pedal to the metal," so the timing of its announcement a day after the HP Palm deal is coincidental, said John Spooner, an analyst at Technology Business Research, Inc.

Acer, HP, and Dell have all been eyeing margins in the mobile phone space since "they are all PC vendors who want to be phone vendors it's a natural extension for all three companies,'' said Spooner, in Hampton, N.H.

Spooner said it's going to be a huge challenge for the three vendors to gain marketshare in the mobile phone space and will require "significant investment, a lot of marketing and close ties with the carriers -- you have to have the backing of the giants, Verizon and AT&T,'' as well as products that will catch consumers' eyes.

HP has a differentiated product, Spooner notes, since Palm is a well-established, proven brand. However, "it hasn't been marketed well so they have to execute on the marketing side and make people love it, whereas Acer is more in the early stages of 'How do we develop a great looking product and how do we market it?'''

Spooner likens the two announcements to a chess game and says "HP has moved few steps ahead." But Acer has been specific about wanting stylish designs, touchscreens, and superfast processors. It's using Qualcomm's Snapdragon platform, he said. "So they're saying all the right things and making all the right moves. In the end the customer has to say how they're going to feel about these phones."