Mobile Information Technology

The Taiwanese computer maker is betting big on smart phones. So is everyone else.

A world map mounted on a wall at computer maker Acer's Taipei headquarters provides a window into the company's strategy. The map is dotted with icons that show Acer's personal computer sales rank in different territories: number one in France and Germany; number three in the U.S. and Latin America. It's clear that the goal is to rank number one everywhere as quickly as possible.

Acer has already come a long way. Founded as a microprocessor design firm in 1976, this past summer Acer overtook Dell to become the world's second-largest seller of computers (behind Hewlett-Packard). It has been gunning for the portable computing crown. Chief Executive Gianfranco Lanci says Acer intends to sell more notebook and netbook computers by 2011 than HP-- 40 million units, according to analysts. "We are getting very close," he says. Revenues have doubled since 2004 to an expected $18 billion this year, aided by the acquisitions of computer makers Gateway in 2007 and Packard Bell in 2008. Profit this year is supposed to come in near $370 million.

Now Acer is joining the stampede into mobile phones. In February it launched a line of smart phones using Microsoft's Windows Mobile software. Acer has since announced five more phones, including one that runs on Android, Google's mobile platform.

The grass looks green over there. Worldwide sales of mobile phones--an estimated 1.1 billion units this year, including 150 million smart phones--far exceed the expected sales of 280 million personal computers. The fact that there's a stampede will of course change things, but until now smart phones have earned gross profit margins of 30% or more, compared with the 3% or 4% for the low-cost computers that compose much of Acer's business. "The [smart phone] margins will go down as soon as the market grows, but it's still much better than PCs," says Lanci, an Italian who splits his time between Milan and Taipei and took over as chief executive in 2008. Under his leadership Acer quickly latched on to the rise of netbooks, a trend that fueled its growth over the past year.

Lanci's goal is to make Acer one of the five largest sellers of smart phones by 2014. Acer's experience as a vendor of computers gives it advantages over traditional handsetmakers, he contends. "Consumers want a similar experience on smart phones as they do on PCs," he says. "We have a much better understanding of that than people coming from the phone industry."

Back to the stampede. HP has offered a line of business-focused phones called the IPAQ since 2004 and says it has sold millions of them. It plans to begin selling a new IPAQ phone through AT&T in early December. Dell and Lenovo recently developed smart phones for China Mobile. Dell also struck a deal with a Brazilian carrier and has hinted that similar handsets will be available in the U.S. next year.
Source:http://www.forbes.com/forbes/2009/1214/technology-taiwan-computer-phones-acer-mobile-gamble.html

Back in February, at the Mobile World Congress in Barcelona, LG wowed the world with an astonishing style statement in mobile phones: a prototype handset with a transparent keypad! Dubbed the ‘Crystal’, it turned heads and was the talk of the town.

Dell has, at long last, confirmed its intentions to get into the smartphone market. The company’s first handset will be the Mini 3, about which Dell is saying nothing other than that it will run on the Google-backed Android operating system. If we know Dell, it likely won’t matter, as there is sure to be a deluge of handsets, all with slightly different specifications.

What we do know is that Dell isn’t messing around with some tiny market, here. The Mini 3 will launch in China and Brazil, where the partner companies have a lot of customers: China Mobile serves half a billion people, and the Brazilian telco Claro has 42 million customers. And this is just the start: Dell states that it is planning to take over the rest of the world, too.

It’s a smart move on the part of Dell. Some time in the future laptops will be like desktops are today: specialized tools for the minority. Everyone else will likely be using some kind of phone-like computer. And this is the angle that should have Microsoft worried: Those phones aren’t going to be running Windows, nor even Windows mobile. When a company the size of Dell gets behind the free Android, saving on all those OS license fees, you know something is up.

Dell’s press release said nothing about prices or features, other than to blandly state that “details of phone models will be announced on a partner-by-partner basis when devices are available in stores, anticipated in late November for China Mobile and year’s end for Claro.”