Comparing Apple to the largest PC company we never talk about

  • Analyst Opinion - Acer, after acquiring Gateway and through Gateway Packard Bell, is now world’s third largest PC company.  I have been at their press and analyst event this week analyst event in New York and I am somewhat surprised that, given how big these guys are, we don’t talk about them more often.    They just announced one of the most attractive notebook lines I’ve ever seen and I can’t resist comparing them to Apple.

    Part of this story is that this company, prior to the Gateway acquisition, wasn’t really that big in the US.   I’ve written about their Ferrari laptops from time to time but I can’t recall writing about any of their other products in recent years. Now it is probably time to take a look at Acer, to provide perspective and to compare it to Apple.  

    Acer vs. Apple: Where they are similar

    In some ways, Acer and Apple are similar companies; in others they are vastly different. The are similar in being focused on individual buyers rather than corporations. Apple appears to be changing its focus slightly with the release of its iPhone SDK but this likely is due to their realization that corporations are the funding source for most smart phones. Outside the iPhone, both firms seem to know their target customer base well and remain unusually (for the segment) focused on it.  

    Both companies are growing in the 30% range and towards the top of the PC segment and both are clearly scaring their competitors half to death.

    Acer vs. Apple:  Where they are different

    Apple is more of an end to end player and very control oriented.  This has the benefits of better being able to control their superior user experience, but has the disadvantage of being a niche player in the market (granted, they are a big niche player).   Acer is more focused on providing high quality at a low price on Windows, which gives them access to a much broader market, but makes them dependent on others, like Microsoft, to complete the user experience.   

    Acer’s partnership strategy extends to companies like Dolby, companies that complete the solution on some of their products to improve the movie and music experience.  Dolby is arguably the technology leader in sound conditioning.  They provide one of the few notebook lines, as a result, that actually does a reasonable job of emulating a 5.1 experience with a good set of headphones as a result.  On the other hand, Apple’s offerings tend to be more consistent with each other and easier to use, though Acer appears to be going the same way by slowly taking over the user interface for some of these features to provide a similar benefit.  

    While Apple has a very limited line in terms of product depth, Acer’s approach is much broader.  Not only does Acer have lines under multiple brands, but the line they were presenting at this most recent event has a 18.4” screen version and a 16” screen version, which provides more size choice than Apple typically does in a single line (Apple typically gives you only one choice) - and this is just one of Acer’s many lines.  

    Both companies like flagship products, but have gone different directions.  For Acer, the Ferrari line demonstrated a co-branded approach to a flagship product and Apple has recently brought out the MacBook Air which focuses on pushing the technology envelope for a flagship offering.

    Acer vs. Apple: The battle to come

    While I compared these two companies so that you could better understand Acer, it is clear that these two companies will now increasingly bump heads.   Acer recently acquired one of the largest cell phone companies in China and this company actually had an iPhone like product years before Apple did.   In addition, Acer is becoming very aggressive in terms of controlling the user experience and while they are currently limited by Microsoft in terms of providing the kind of end to end user experience Apple does, Acer is clearly working to overcome this limitation.   

    The sustaining advantage Apple has is Steve Jobs and what is arguably one of the best marketing organizations in the segment. There is also an end to end control that other vendors can only dream about.  For Acer, it is a vastly broader reach in almost every product vector from brands to lines to individual products.  Neither company can easily move to address the other’s advantage but Acer appears to be moving more aggressively in Apple’s direction than Apple in Acer’s, but both have a long way to go. 

    This will be an interesting fight to watch over the next few years.   

    Rob Enderle is one of the last Inquiry Analysts.  Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them.  Currently he provides his services to most of the major technology and media companies.