Acer vows to topple Lenovo next year

At its 30th anniversary party, Acer moved up the time it expects to take over the No. 3 slot in global PC market share to 2007, shaving a year off its previous forecast.

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Its strategy is to partner with more PC parts suppliers and distributors, who in turn will help to expand its market. Expressing confidence in that business model, Acer executives said the company could keep up its breakneck growth and topple Lenovo Holdings by the end of next year.

"We can become No. 3 through organic growth, not through merger and acquisition," said Gianfranco Lanci, president of Acer, during the celebration Tuesday at an upscale hotel in downtown Taipei.

China's Lenovo is currently third in global PC shipments, with 7.8 percent of the market, according to IDC. Although Acer trails at 6 percent, the company is growing at a much faster pace than Lenovo: 34.3 percent in the third quarter, compared to around 10 percent for Lenovo. In fact, Acer's growth rate vastly outpaced the first- and second-place PC makers as well, with Hewlett-Packard at 15 percent and Dell at 3.6 percent.

The Taiwanese PC maker expects to continue its momentum in PC sales by selling more laptops and small form-factor desktops. By focusing on smaller desktops, Acer can run the business similarly to its laptop business, said J.T. Wang, chairman of the company.

It will also continue to hone its strategy of partnering with more suppliers and distributors. Acer believes the key to winning over new partners is to offer good products that generate stable demand, and giving up some profit margin to ensure its channel partners make reasonable profits as well.

"They grow with us," said Wang. And the partnership makes it difficult for partners to do anything that hurts Acer, since their profits become tied together. "If they hurt Acer, they hurt themselves," Wang added.

The direct sales method championed by Dell has matured somewhat, Wang and Lanci said, as electronics retailers learned to market PC hardware on the Internet as well.

Acer believes the U.S. and China will continue to grow in importance for the company, despite the fact it only entered the two markets a short time ago. The U.S. already accounts for as much as 20 percent of Acer's revenue, up from almost nothing two years ago, while China accounts for about 6 percent, Lanci said.

Acer's revenue rose 17 percent year-on-year in the first nine months of the year to NT$250.99 billion (US$7.5 billion), and securities houses such as Goldman Sachs expect it to forecast brisk fourth quarter growth when it holds an investors' conference later this week.