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.