Acer Aims to Become China's Second Largest NB Brand

Taipei, Aug. 23, 2010 (CENS)--In the wake of the approval of the branding agreement with Founder Technology by its shareholders' meeting on Aug. 20, Acer Inc. will focus on tapping China's notebook PC market, especially markets in fourth- through sixth-tier cities, in the hope of becoming China's second largest NB brand in the shortest time, trailing only Lenovo, said J.T. Wang, Acer chairman.

In an exclusive interview with Chinese-language Economic Daily News (EDN), sister publication of Taiwan Economic News (TEN), Wang pointed out that Acer will combine its prowess in notebook PC and Founder's position as the second largest brand in China's desk-top PC market to tap China's fast expanding notebook PC market. Until now, Founder has been hampered by the lack of economy of scale in its effort to penetrate the notebook PC market.

Wang pointed out that China is poised to overtake the U.S. and become the world's largest consumption market in two years, as Chinese consumers have become increasingly rich, thanks to years of rapid economic development and continuous wage hikes. Lenovo owes its extraordinary performance to the success in penetrating the markets of the fourth- through sixth-tier cities, which deny easy access to foreign brands, according to Wang.

The aforementioned agreement authorizes Acer to utilize and manage the Founder brand for seven years by paying maximum royalty of 70 million yuan (NT$2.24 billion). In addition to the Founder brands, for both Chinese and English versions, Acer will also share Founder's marketing resources and the intellectual properties needed for the management of Founder brands.

The combination of Acer and Founder will boast a double-digit share of China's NB market, ranking fifth place, behind Lenovo, ASUS, HP, and Dell. Founder now racks up annual revenue of US$1 billion, compared with US$1.5 billion of Acer's China operation.