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Acer Aims to Capture 15% of Tablet PC Market in 2011

Gianfranco Lanci, chief executive officer of Acer Inc.
Gianfranco Lanci, chief executive officer of Acer Inc., poses for a portrait in Chongqing, China. Photographer: Nelson Ching/Bloomberg

Dec. 2 (Bloomberg) -- Acer Inc. said it’s aiming to capture 15 percent of global tablet-computer sales next year, challenging Research In Motion Ltd. and Samsung Electronics Co. for second place in a market dominated by Apple Inc.’s iPad.

Shipments will begin next quarter as the Taipei-based personal-computer maker jumps into a market where global shipments may reach 50 million units in 2011, Chief Executive Officer Gianfranco Lanci said yesterday in an interview in Chongqing, China.

Lanci’s projections indicate Acer, the top maker of low-end laptops known as netbooks, may sell more than twice the number of tablets JPMorgan Chase & Co. estimated last month. The push highlights the intensifying competition to become No. 2 in the fastest-growing segment of the computer industry as companies from RIM to Samsung battle to offer the most popular alternative to the iPad.

“The company has talked aggressively about the tablet market but Apple is still very dominating,” said Steven Tseng, an analyst at RBS Asia Ltd. “Aside from price it’s hard to tell what Acer has in their products to differentiate themselves and outperform. If they make cheap models like in the netbook area, they may have success. They’re really good at volume business.”

Still, Tseng rates Acer shares “hold,” partly on concern that new tablet products may not be able to make up for declining sales of netbook computers.

The Competition

Acer rose 1.7 percent to NT$94 in Taipei trading today, limiting this year’s drop to 2.2 percent.

Acer last month unveiled a lineup of three tablet computers -- two devices based on Google Inc.’s Android operating system and one on Microsoft Corp.’s Windows software.

The tablets may be priced between $299 and $599, depending on configuration, screen size and connectivity, Lanci said. The iPad is priced between $499 and $829 in the U.S.

Samsung, based in Suwon, South Korea, unveiled its Galaxy Tab in September, and RIM plans to release the 7-inch BlackBerry PlayBook next quarter.

“There is competition and we are set to compete,” Lanci said. “We have strength in designing and developing product. We have strength in terms of channel. We have strength, probably more than other people, in emerging markets.”

‘Dead on Arrival’

Apple’s iPad sales will almost double to 25.5 million next year, while Samsung will sell 6 million tablets and RIM will sell 5 million PlayBooks, according September estimates at Canaccord Genuity.

Tablets bridge the gap between laptops and smartphones such as RIM’s BlackBerry and Apple’s iPhone. Apple, which showed the appeal of such devices by selling 3 million iPads in the first 80 days after the product debuted in April, accounted for 95 percent of the tablet market last quarter, according to Strategy Analytics.

Apple Chief Executive Officer Steve Jobs in October said that devices such as the PlayBook are “dead on arrival” because they are too small to compete with the iPad, which has a 9.7-inch screen.

Lanci dismissed Jobs’ comment, saying there is room for both sizes.

“It depends on user needs,” Lanci said. “While a 10-inch tablet is a very good solution at home or in the office, seven inches can be a very good solution for people traveling or with different needs, even replacing e-books.”

Chongqing Plant

Acer will start delivering its tablets in the first quarter from existing plants in and around Shanghai, Lanci said. Production of the devices may shift to a plant in Chongqing, which is part of the $150 million investment in the city that Acer and the municipal government agreed on yesterday, Lanci said. The new facility will start operations in the third quarter, he said.

The Chongqing plant will have the capacity to produce 30 million to 40 million notebooks or netbook computers annually, and will also manufacture smartphones and tablets, Lanci said. The factory will help Acer almost double the portion of sales it gets in China to 25 percent of revenue within three years, from more than 10 percent projected for next year, he said.

China will likely overtake the U.S. as the world’s largest computer market within three years, Lanci said. Acer had 13 percent share of the global PC market in the third quarter, ranking it second after Hewlett-Packard Co., according to IDC.

Lanci said growth of tablet computer sales won’t kill the company’s netbook business.

“We don’t see the netbook market dying or declining, except in the U.S.,” Lanci said. “For netbooks outside the U.S. we still see very good growth. The two segments, we are convinced, will coexist together. We see tablets as another opportunity to grow the PC market in the future, not tablets as replacing other devices.”

To contact the reporter on this story: Edmond Lococo in Beijing at

To contact the editor responsible for this story: Young-Sam Cho at

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