Acer vs Lenovo: Battle Over?

Posted by: Bruce Einhorn on April 13, 2009

Not too long ago, the hottest battle in the PC industry was between Lenovo and Acer: the biggest computer company in China up against the biggest computer company in Taiwan in the latest battle in the decades-long rivalry between the governments in Beijing and Taipei. The two were about tied for third place in the world’s PC rankings, behind HP and Dell, and both had big ambitions to close the gap through acquisitions of down-on-their-luck American companies. Lenovo took over the PC division of IBM in 2005, and Acer bought Gateway two years later. At the same time, the Taiwanese company took over Packard Bell, which had the side effect of thwarting Lenovo’s bid to acquire the company and build its European business. To run things, both Lenovo and Acer brought in foreign managers: At Lenovo, former Dell exec William Amelio, an American; at Acer, former Texas Instruments exec Gianfranco Lanci, an Italian.

So much for that rivalry. The two companies are heading in different directions, something that probably is very frustrating to government officials in Beijing who thought the IBM deal meant China’s hometown favorite would surely top its Taiwanese counterpart. (See my BusinessWeek story in the print edition about Acer’s rise.) Lenovo is stuck with about 7% of the market, while Acer has moved into double digits, climbing within 2 percentage points of market leader Dell. Lenovo has had to lay off thousands of workers but Acer hasn’t had to drop anyone. Lenovo has gotten rid of its imported boss, Amelio, while Acer’s Lanci has gotten a promotion to CEO. Lenovo’s stock price has dropped 63% in the past twelve months, down almost 10% since the start of the year. Acer? Up 4% in the past twelve months and 40% so far this year.

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Reader Comments

Kent

April 13, 2009 01:18 PM

This is a funny commentary. it is quite easy for anyone to think lenovo and acer a battle between government (more dramatic right?). and from the sales figure it is all too easy to discredit the effort of lenovo since sales figure tell all the story.( this is the best Businessweek can think of?)However from another viewpoint i m surprised that lenovo still stand after all those turmoil after acquisition. Remember Benq (another Taiwaness company) collapse in 1 year after the acquisition of Siemens mobile. lenovo still make reputable computer and it holds high reputation. This asset is invaluable and i believe there would be come back from lenovo one day. of coz, now the battle between dell and acer would be under spotlight.
btw lenovo is a a few companies not control by the government. maybe to an extent the beijing really dont want to see it too success since that would proof market-economy totally inefficient?

Steve

April 13, 2009 02:02 PM

Now Acer going after Dell and HP.
It is pure business it is not about government.

Janic

April 14, 2009 12:15 AM

There is no end to Lenovo's funding. Watch and see.

Also, this is an American website. Please learn to write English.

Kent

April 14, 2009 08:36 AM

'There is no end to Lenovo's funding'.....seems familiar case to some 'american' business too?

Leo

April 14, 2009 11:27 AM

Slownovo are not even in the race, dell and hp are too late to react, Acer no 1 notebook vendor worldwide yes for sure soon, overall no 2 pc vendor in 6 months yes! Acer is the clear winner and are stronger than people like to think, 100% indirect and focused, what this space

Leo

April 14, 2009 11:38 AM

Lenovo, Fujitsu lost the war, just to be clear, DELL & HP are heading downwards, Acer are growing and in a profitable way, Acer will be no 1 notebook vendor worldwide its not a case of if, its when? and will become no 2 pc vendor worldwide within 6 months, 100% indirect and focused.

rob

April 14, 2009 10:17 PM

CHINA is incapable of properly running real companies which function by market principles rather than the crony capitalism of the People's Republic.
INDIA's foreign takeovers by contrast, are stunning success stories, ex: Tata Steel and Corus.
Taiwan and India are free democracies and proper capitaist nations with morals and ethics.

Shuzuki

April 15, 2009 01:11 PM

Only Amrica win!
Both Acer and Lenovo'e need to use the American main important device call CPU!!

Shuzuki

April 15, 2009 01:11 PM

Only Amrica win!
Both Acer and Lenovo'e need to use the American main important device call CPU!!

FunnyIndian

April 17, 2009 12:36 AM

@Rob , this article is about Acer and Lenovo, it has nothing to do with your India, so don`t bragging your indian stupidities and idiocies in this forum, BTW no one care your India.

Howard

April 18, 2009 06:04 AM

The only chance for Lenovo to win this laptop battle is to develop and sell a new model of laptop using China's new CPU (costs about 30% of Intel and AMD), and China's new OS (costs about 10% of Microsoft) to all markets worldwide.
Working together with Huawei and ZTE for built-in 3G wireless network chipsets can also help.

No Marketing

April 19, 2009 06:08 PM

Lenovo, just like other chinese companies, is not doing good job in marketing.

Interconnect

April 21, 2009 08:08 AM

Convergence! Converged 3G Wireless network chipsets help Huawei, ZTE success in Pakistan market with WiMax, EVDO Rev. A, but not the Chipset of China's CPU, OS. Lenovo lost the golden opportunity by premium brand prices for the Chinese IBM Think Pad not the Lenovo a Chinese brand. Lenovo should immediately follow the leadership of ZTE, Huawei and focus on the FTA / PTA countries agreements to crack the market with Pakistan and the regional partners. Converged Lenovo is failed, shuld come with the Chinese 3G Chipset on the laptop. eMail: interconnect.partner@gmail.com

Chang

May 9, 2009 05:21 AM

Communist China has yet to produce a thinking company. Marching with Mao and Choinlai and killing with Choinlai is not the same as having a brain and living in a real country. China is run by thugs and people with no education. That is why I left China. India is a better example. Sorry PLA. Not all smart Chinese were killed in the cultural revolution, some ran away.

mazz

June 1, 2009 09:24 AM

acer is a worst brand have seen in my

mazz

June 1, 2009 09:28 AM

acer,,,bluddy thirdclass performance,,,,not more than 1 hour battery backup for even stand by mode ...always gets hang and heats up a lot,,never ever take that acer in ur life,,,i dont want to u also suffer in life like me

Sam

February 27, 2010 02:21 AM

Actually the CPU and memory are engineered OUTSIDE the USA as the only thing American is the BRAND CPU's memory and hardware are engineered in Asia and Israel. Long ago jobs and then companies were exported and sold off. So while some dis the Chinese at capitalism, how come they are two trillion in the black with all of our jobs. This is the 21st century like it or not China is ONE BIG CORPORATION.
While we are back to thinking like it is 1913, the rest of the world is well into the 21 century. If we were half as good at capitalism as we think we would not be in the position we are in.
The reality is the cats got fat and sold out.

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BusinessWeek’s team of Asia reporters brings you the latest insights on business, politics, technology and culture from some of the world’s biggest and fastest-growing economies. Eye on Asia’s bloggers include Asia regional editor Bruce Einhorn, Tokyo reporter Ian Rowley, Korea bureau chief Moon Ihlwan, Asia News Editor and China Bureau Chief. Dexter Roberts, and Hong Kong-based Asia correspondent Frederik Balfour.

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