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Bitten by smartphones, Acer swears by PCs

Thursday, 6 December 2012 - 7:00am IST | Place: New Delhi | Agency: dna

After an unsuccessful foray into the premium (`10,000–30,000) smartphone market, Acer India plans to focus on its PC segment and go slow on smatphones.

After an unsuccessful foray into the premium (`10,000–30,000) smartphone market, Acer India plans to focus on its PC segment and go slow on smatphones.

“We found that the (premium smartphone) space was not reasonably large. The whole thing was brutal, in terms of the price points. So we said this is something which does not much of a business case,” said Harish K Kohli (pictured), MD of Acer India.

“We have taken a conscious business decision to maintain a low profile in this segment.” This means, Acer, contrary to speculation, won’t launch any low-cost smartphones. It sees itself as a PC-and-IT player and has no plans of becoming an aggressive telecom handset player.

According to the company, after launching nine premium smartphone models in three years they realised that there was not enough market for such niche devices in India currently.

However, the firm denied to disclose if it would immediately put a stop on launch of any new model. “It is too early for us to comment on the launch of new products,” Kohli said.

Currently the high-value smartphone market in the country is dominated by players such as HTC, Sony, Apple and Samsung offering devices in the range of  Rs10,000 to Rs40,000. “In India people want to associate with a brand. Brands like Acer and Asus are essentially recognised with laptops and not with handsets,” Abhishek Chauhan, senior consultant, ICT practice, Frost and Sullivan, told DNA.

“If an Indian consumer spends good money on a handset he wants the brand to have a good market recognition in that category,” he added.

Companies in the country offer smartphones in the range of Rs4,000 to Rs40,000. However the average cost of a smartphone is Rs13,000. Frost and Sullivan estimates to have almost 220 million mobile handsets shipments in the country by the year end with almost 20 million being smartphones.

In the PC segment, however, Acer has ambitious plans ranging from government projects, new products to extending its reach through 1,000 branded outlets in smaller towns and cities by 2012-end, and opening another 1,000 by 2013-end, taking the overall figure to over 5,000.

Acer already has large government order and from the education sector, including the deal with Electronics Corporation of Tamil Nadu for distribution of laptops to students. The company is eyeing similar deals in Uttar Pradesh and Goa.

Out of Rs3,000 crore sales last fiscal, Rs850-900 crore worth orders came from government projects, Kohli said. “We are also focusing on strengthening our portfolio in the notebooks space. With the Windows 8 launch, we have beefed up our product range,” said Kohli.

Acer is the second largest PC-vendor in the country with a market share of 15.7%, according to Gartner.

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