Acer closes in on Lenovo

Bruce Einhorn

The feud between Steve Jobs and Michael Dell of course gets a lot more attention, but my vote for most interesting rivalry in the computer industry today is between Yang Yuanqing of Lenovo and J.T. Wang of Acer. The two companies are competing for bragging rights as the leading computer company out of Greater China. Acer is No. 1 in Taiwan and big in Europe but has long struggled in the U.S. Lenovo is China's No. 1 and leapfrogged ahead of Acer to become the third-largest PC maker worldwide after Lenovo's 2005 acqusition of IBM's old PC business. Yang and Wang have had similar career paths: Both served as No. 2 and moved to the chairman's job a few years ago following the retirement of their companies' charismatic founders - Liu Chuanzhi at Lenovo and Stan Shih at Acer. And both Yang and Wang have brought in experienced Westerners to help them run their companies - Bill Amelio, CEO at Lenovo and former exec at Dell, and Gianfranco Lanci, president of Acer and former exec at Texas Instruments.

The Taiwanese are old pros in the IT industry and no doubt someone like Acer's Wang resents the idea of newcomers like Lenovo's Yang jumping ahead. Certainly Wang doesn't try to hide his disdain for the computer company from the other side of the Taiwan Strait; shortly after the Lenovo-IBM deal, for instance, he went out of his way to tell me how Acer had been offered a chance to buy IBM's PC business but had declined. Late last year, Wang and Lanci predicted that they were on track to pass Lenovo in market share. That moment may come faster than even they expected: Yesterday IDC announced figures for the fourth quarter of 2006, and they showed that there's now only a tiny gap between the two, with Lenovo at 7.3% and Acer at 7.1%. Analysts I've interviewed expect Acer to maintain its momentum, which means that chances are good that the two companies will change places soon and, as far as the Taiwanese are concerned, the natural pecking order is restored.

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