Where's the Beef in Acer's Gateway PC Buy? - InformationWeek

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8/27/2007
04:43 PM
Fredric Paul
Fredric Paul
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Where's the Beef in Acer's Gateway PC Buy?

Like the Wendy's customer asked way back when: where's the beef in today's $710 million takeover of Gateway by Taiwanese computer maker Acer? Sure, the deal makes Acer the number 3 PC-maker in the world, pushing past mainland China's Lenovo (which got that big by swallowing IBM's PC business). I just don't think it's likely to have an immediate impact on small and midsize computer buyers.

Like the Wendy's customer asked way back when: where's the beef in today's $710 million takeover of Gateway by Taiwanese computer maker Acer?

Sure, the deal makes Acer the number 3 PC-maker in the world, pushing past mainland China's Lenovo (which got that big by swallowing IBM's PC business). I just don't think it's likely to have an immediate impact on small and midsize computer buyers.Christopher Null at Yahoo Tech agrees. If anything, it's likely to make Gateway purchases a bit safer, since the company had been struggling for years, showing no profits and losing a third of its sales since 2001 even after buying eMachines in 2004.

With Acer's heft behind it, we might see more effort put into the US market. Gateway's significant online presence offers a real opportunity for Acer, says Lance Ulanoff at PC Magazine. But all three brands may not survive, according to Doug Olenick at Twice. Acer and eMachines produce very similar products, Olenick says, and something's gotta give.

At the same time, the Acer-Gateway deal could kill Lenovo's talks to buy Netherlands-based Packard Bell. Antone Gonsalves at InformationWeek reports that, "Gateway owns all of the shares of Packard Bell parent company PB Holding," and Packard Bell may end up as part of Acer.

With all the of maneuvering going on, though, it may not add to much for business buyers. Gonsalves quotes Analyst Jack E. Gold of J. Gold Associates saying:

We do not believe that much will change in the overall PC market. Acer does bring lots of manufacturing muscle to the table, but the Gateway brand will remain and be primarily targeted at budget conscious consumers. It has minimal impact on the business user market.

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