Experts believe that the initial impact on consumers of the sale of Gateway to Taiwan PC giant Acer will be relatively small. However, one of the biggest issues raised by the acquisition is how the newly combined Acer will present its three product brands (the Gateway purchase includes the eMachines budget PC line) to consumers, especially considering that some of those brands already have duplication today.
The deal to purchase Irvine, California-based Gateway propels Acer into the spot of third-largest PC maker in the world. In a further complication, Gateway announced it will exercise its option to buy out European PC maker Packard Bell--a move that stymies Chinese PC-maker Lenovo's growth-by-acquisition plans. Lenovo is the maker of the popular ThinkPad line of laptops.
How the brands will be segmented in the future will likely depend upon a number of factors. As of now, says IDC research analyst Doug Bell, "they're going to keep all three brands separately in the marketplace--Gateway, eMachines, and Acer." (Disclosure: The IDC market research firm and PC World are owned by the same company, IDG.)
Acer will probably try to reinvigorate the Gateway brand, using spiffier designs and faster processors in an effort to add cachet to the Gateway and eMachines labels, which are often seen as "bottom dwellers" selling low-cost PCs, says J.P. Gownder, a principal analyst with Forrester Research.
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In a news conference, Gianfranco Lanci, president of Acer, indicated that the company plans to keep, and perhaps even expand, the Gateway brand going forward.
"But I think what we'll see is going to depend upon the region; Acer will see which brands work best where," Bell says. For example, Acer currently is stronger in Asia and Europe than it is in the United States.
Combining the product lines produced by the new Acer-Gateway entity, though, also will present a challenge on two very different fronts--desktops and notebooks. While the industry has had precedent for a single company maintaining two distinct brands in the marketplace, doing so has proven a delicate balancing act. For example, Gateway has successfully maintained the eMachines brand at retail 3.5 years after it acquired eMachines. However, Gateway has done so by allowing eMachines to continue playing to its established niche, that of a low-cost retail brand.
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