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The IPad Takes Down Acer CEO

TMCnet Feature

November 12, 2013

The IPad Takes Down Acer CEO

By Drew Hendricks

Remember Acer? It seems like light years ago, but back when Steve Jobs (News - Alert) first introduced the iPad, Apple wasn't at the top of the tech giant pile--it was actually Acer, a Taiwanese company that had struggled diligently to overtake Dell and Lenovo during the 1990s, sweeping up Gateway in the process to become a beacon of tech almightiness in the United States. In fact, Acer (News - Alert) was primed to take down Hewlett Packard, another throwback company that hasn't been too prominent in recent years.

 It was only 2010 when the iPad first came onto the scene, but at the time the chairman of Acer wasn't very concerned. JT Wang was more focused on taking down HP "within two to three years," he noted. His goal was to become the number one PC company in the country. He was so confident that he said, "Whether it's 2012 or 2013, it doesn't make much difference to us." He's likely regretting those words now as the iPad has completely overtaken Acer, turning it into a distant memory for some and a niche market for other diehard fans.

 A bad choice

 Acer was making some serious ground, especially in the netbook market--but the thing is, nobody uses netbooks anymore. The tiny laptops were cheap, and for a brief instant they seemed to have what it took to overthrow the entire PC industry. Then the iPad was born. It killed the netbook revolution in one swoop, and nobody seemed to notice the massacre (except the top execs of Acer, of course). Wang did what he could to revive his company, dipping into the smartphone and tablet market, but it was a futile effort.

 The Taiwan company is yet another Apple (News - Alert) victim, losing $445 million in a single quarter. While analysts were expecting a hit, this was even worse than the most cynical of them imagined. After all, Acer had succeeded in wooing Gateway (News - Alert) and other positive acquisitions peppered their strategy, but nothing was a match for the iPad.

 Acer was buying wisely, but their Chinese nemesis Lenovo (News - Alert) was also gathering steam--Wang's rise to the CEO of Acer in place of Gianfranco Lanci was considered a good move by many, but in the end even he couldn't save the company.

 The mighty have fallen

As Wang moved to the top of Acer, Lenovo snatched up Lanci--and Lanci took Lenovo to the top spot in the PC market, complete with some innovative spokesperson choices. The vast majority of Chinese consumers opt for Lenovo products, which might also have something to do with Lenovo severely displacing Acer, as Taiwan simply doesn't have the demographic to compete with a "homemade" brand that a Chinese company can market. In total, 33 percent of Lenovo PCs are bought by Chinese consumers, a huge advantage that Lenovo could simply never have.

 According to some critics, the biggest mistake Wang made was failing to win over the Chinese market and simply letting Lenovo take over. Acer is shrinking at an alarming rate, shipping only 8.5 percent of all computers to China in 2011, and that number is now hovering around six percent. Managing a business is always a gamble, no matter where the market is what tools are available. Sadly, Acer doesn't have anything to fall back on, having failed in the tablet and smartphone market. Unless the company can pull off a miracle, the next few years will likely mark the end of the Acer empire.


Edited by Cassandra Tucker

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