Analyst Opinion - I just came back from a trip to Budapest and a deep dive with Acer, which has about the same market share in the U.S. as Apple, but is substantially larger world wide. However, Apple is substantially more profitable and, particularly under the current market conditions, I’d put profitability and valuation ahead of market share as a way to measure the success of a company.   Others clearly don’t and given these two firms are actually very close to each in market share, I believe it is interesting to compare them with a closer look.   

Acer is vastly broader in the PC space than Apple is, but currently lacks either MP3 or phone products (though they too have a phone coming and it likely will be based on a future version of Intel’s Atom platform). Acer is one of the few multi-brand technology companies, which this gives them four distinct product lines. The entry level eMachines line, the mid-level Acer line, and the two premium lines Packard Bell in Europe and Gateway in the rest of the world.  

Apple only has one PC line. It is a premium line most closely aligned with the Acer Packard Bell and Gateway lines. However, there is a distinct difference in approach to the market. All of the Acer lines are comparatively broad based on the more typical approach to studying a market and building products for segments that have distinct desires and requirements.  Acer has some of the best looking products in the segment though they currently lack an Air or iMac like offering (HP, interestingly enough, is the only company to truly challenge Apple in All-In-One PCs - and only recently with their TouchSmart - and had the very first Air like offering years before Apple did).   

Currently, Acer’s Gemstone line is one of the most attractive in the segment and their Predator and iPower X2.0 are impressive efforts. But Acer is really more of a notebook company overall.   

Apple, conversely, is more like the Model T years of Ford, since the company’s line is comparatively shallow, but they focus on changing the perceptions of people so they gravitate to the products Apple is building.  This allows them to have lower inventory risk and contributes strongly to their higher margins.  In addition, this marketing focus on product creates what appears to be a higher satisfaction score.   While I don’t have Acer’s NPS scores (NPS is currently the best way to measure customer satisfaction) it is generally believed that their score is on the top.


Marketing

This drives us into Apple’s greatest strength which is the strongest benefits oriented marketing organization in technology. Apple actually outspends HP, the largest Personal Computer vendor in the world, by somewhere between four and ten times depending on the time of year. This is what allows them to build fewer products and drive people to them. An example of this is the iPhone which is both large and based on touch screen technology both of which the market largely rejected when it was provided by other vendors. Apple was able to build a phone that the market shouldn’t have liked at all and get lines around the block when they launched both versions. Even when serious problems were discovered with the phone they sold strongly through problems that likely would have crippled the sales of any product from another vendor in this class.  

Acer, on the other hand, is not known as a marketing company.   For instance, in the Budapest event they spent very little time on products in the critical general sessions which seemed focused on trying to explain why the company was successful.   Even after spending hours trying to explain their multi-brand strategy, the people in the audience, based on the questions, didn’t seem to grasp what it was.   This was because Acer didn’t use strong examples like GE or Toyota and because Apple sets the standard and Apple is using a single parent brand strategy. Apple doesn’t need to explain the company’s strategy.  

The advantage of a single brand is it aggregates your marketing resources, which are focused on the parent brand itself and the disadvantage is that it reduces dramatically the ability to focus on unique aspects of any targeted group. Doing multi-brand marketing right is very expensive, because each brand has to be funded, which is why it isn’t done that often successfully. But when it is done well (Proctor and Gamble), you don’t have to explain it.  

This means that people leave Apple events chatting about and writing (generally positive) about the products they have seen. This is massively beneficial during buying periods like the one we are entering and particularly important when entering hard economic times like we are currently entering.   Discussions as folks left the Acer event appeared to surround the company’s structure, channel and brand strategy. In effect, Acer largely missed an opportunity to really get people excited about their products which were actually very nice right before the biggest purchasing period of the year.


Read on the next page: Channel strategy, customer experience