TAIWAN: Acer Founder Says US PC Makers May Become Extinct

2010-01-20

By: Michelle Maisto

The founder of Acer reportedly tells a Taipei paper that U.S. PC makers such as Apple, Hewlett-Packard and Dell may not be around in 20 years because they don't know how to get low-cost PCs to market.

PC makers Hewlett-Packard, Dell and Apple aren't likely to be pleased by the idea that they may not be in business in 20 years' time, due to their alleged inability to produce inexpensive PCs.

Stan Shih, founder of Acer, headquartered in Hsinchu City, Taiwan, shared this sentiment with the Taipei-based Commercial Times, according to French news service AFP.

"The trend for low-priced computers will last for the coming years. But U.S. computer makers just don't know how to put such products on the market," Shih told the Commercial Times, according to Jan. 19 reporting from AFP. Shih continued, "U.S. computer brands may disappear over the next 20 years, just like what happened to U.S television brands."

Analyst Roger Kay of Endpoint Technologies Associates said he believes Shih has a point, and the remark could serve as a wake-up call.

"Even Apple has its devices made in Asia. But I certainly wouldn't count the U.S. industry out. Most useful innovation is still made in the [United States]," Kay told eWEEK. "If anything, we should take his words as a goad to double down and do more to ensure that our industry remains relevant in 20 years' time."

In the fourth quarter of 2009, as well as for the year overall, HP led shipments both worldwide and in the United States. Worldwide during the quarter, Acer grabbed the No. 2 spot, just ahead of Dell. However, worldwide for the year, it was Dell that held the second-largest share of the market, according to a Jan. 13 report from IDC. Following Dell were Asia-based manufacturers Acer, Lenovo and Toshiba.

PC sales figures in 2009 were helped by brisk consumer acceptance of netbooks, which are generally priced below $400. Overall, however, the low prices of netbooks are said to have negatively affected PC market revenue.

"Acer has had a great couple of years, much of it due to the popularity of netbooks and other low-cost products," Charles King, principal analyst with Pund-IT, told eWEEK. "In addition, the company stands to profit as the demand for personal computing grows in rapidly developing markets like China. If PCs eventually become simplistic, appliance-like devices with little if any differentiation in the hardware, like DVD players or toaster ovens—then Mr. Shih's notions stand a chance of coming true."

However, King added, he doesn't expect U.S. vendors to relax their pace of innovation any time soon.

"I also believe that Mr. Shih's assumption that PCs will even be around in 20 years may be far off the mark," King said. "Given the continual pace of IT evolution, I expect that the personal computing devices we'll be using in 2030 will make Acer's current product lineup look like 1990 PCs with 286 Intel processors and the first version of Microsoft Office."

Analyst John Spooner, with Technology Business Research, also said he expects a far different 2030.

If Shih's remarks weren't taken out of context, "I also think that he's probably right in that the U.S.-based PC vendors will not exist in 20 years in the same ways they do today," Spooner told eWEEK. "I think they'll look and act much different. They've already begun laying the groundwork to increase their purview from hardware to hardware, software and services. Just look at what Hewlett-Packard has done in the last three years. They will continue to evolve and change from there."

Kay, also confident about the pace of U.S. technological innovation, added, "All you have to do is breathe the air in Silicon Valley and you know there'll be innovation coming out of here for years to come."

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