Acer’s notebook ambitions
After bouncing back onto the Indian notebook scene in Q4, 2004, Acer is gunning for a place in the Top 3, says Akhtar Pasha
Acer’s giving a stiff fight to Dell and Toshiba in the battle for the third position in the hotly contested Indian notebook segment. The first two slots are held by IBM and HP. After dropping a notch in AMJ and JAS, 2004, Acer has bounced back with sales of 6,000 units in the October to December quarter of 2004 bagging significant orders from BPCL and Tyco. Defence and educational sales to universities in Nagpur, Cochin and north India contributed their mite, bringing in 25 percent of the numbers.
S Rajendran, general manager, Sales & Marketing, Consumer Product Group (CPG), Acer India, says, “The OND, 2004 sales have come about due to the sales of our entry-level notebooks. We saw a dip in AMJ and JAS, 2004 sales. During this period we were making a transition from Pentium to Centrino mobile processors.” The company stabilised after this transition and came back strongly in OND, 2004. Rajendran expects Acer’s notebook sales in JFM, 2005, a quarter in which last minute deals are expected to happen after the budget, to echo its stellar turn in OND 2004.
Acer has always been a price warrior. Because of its economies of scale, the company has driven the notebook market by undercutting competitors. In 2002 it was the first vendor to bring a sub-Rs 60,000 notebook to market. The following year, it introduced a sub-Rs 50,000 portable and in 2004, a sub-Rs 40,000 (priced at Rs 39,999) unit. Although JAS, 2004 found Acer, HP and IBM exiting this price bracket, Acer re-entered it with the TravelMate 240, a Mobile Intel Celeron processor-based model at the same price point that offered superior value for money (larger memory, 256 MB RAM, DVD or CDR-W combo drive) and a 40 GB HDD when compared to its predecessor that had been dropped in AMJ. Acer’s unceasing efforts have led to a drop in the average unit price of a notebook and have therefore been crucial in driving the expansion of the Indian notebook market. Rajendran says, “Our entry-level line up includes the TravelMate 2300, the TravelMate 240 and TravelMate 250. These account for 55 percent of our notebook sales. The TravelMate 4000 series contributes 35 percent and the balance comes from the high-end Ultra and Tablet series as well as the Ferrari.”
The performance of the Aspire 1362 has silenced critics and analysts who say that AMD-based notebooks are not up to scratch
S Rajendran General Manager, Sales & Marketing, Consumer Product Group (CPG) Acer India
By launching a notebook built around AMD’s Sempron mobile processor (See box: Aspire 1362 series), Acer is employing its pricing card yet again and dropping entry-level notebook prices by 15 percent. The Aspire 1362 features 256 MB of memory, a combo drive with a 15-inch TFT screen and is priced at Rs 35,999.
This product, along with Acer’s bestselling TravelMate 2300 Series, will form the spearhead of its mass market offensive during JFM 2005. Acer has made design changes to its AMD-based Sempron M (Aspire 1362)—air-flow is better and a more powerful fan has been used. It is also providing an international travel warranty to its buyers, something, the company claims, other vendors do not. The company hopes that this will be a big draw.
Although there are other vendors that sell notebooks at this or lower price points (sub-40K) namely Zenith, ACi and Kobian, some of the competing models are based on VIA processors or use desktop processors and ship with less memory (128 MB) and smaller HDDs (20 GB).
While a 36K notebook looks quite attractive, analysts are quick to point out that sub-40K notebooks are not part of India’s mobile computing mainstream. Sanjit Sinha, senior manager, hardware research, IDC India says, “The Rs 50,000 to Rs 60,000 price band accounts for the bulk of notebook sales in India with around 70 percent being Wi-Fi capable.” Analysts are sceptical and state that entry-level notebooks are not part of the volume market. They also say that the AMD Sempron mobile processor requires a larger fan for cooling and this adds weight to the design. Wireless is also missing from the package.
The AMD 64-bit processor ‘Turion’, which has wireless capability, and is the equivalent of Intel’s Centrino is arriving soon (See box-AMD’s 64-bit mobile processor—Turion).
Acer, for its part, claims to have sorted out these two issues by going for a Folio design with latch-less locking. Rajendran says, “The increased air vents in the design improve air-flow and in conjunction with a powerful fan enhance battery life. The AMD Sempron mobile processor offers a longer battery life than the Celeron M processor.”
Even if the notebook is heavy, at Rs 35,999 it is sure to find some takers. Acer says that there is a significant market in the education segment with students in management institutes and the like looking for industry-standard notebooks that offer a better price-to-performance ratio. It is targeting this community with the Aspire 1362. The company is offering an additional discount of Rs 2,500 to drum up sales.
Off to a good start
Just five days after the launch of the Aspire 1362, Acer ran out of stock selling 500 units to students who registered online using their student IDs to avail of the Rs 2,500 discount. Rajendran says, “We underestimated this market. The performance of the Aspire 1362 has silenced critics and analysts who say that AMD-based notebooks are not up to scratch.”
Acer’s product offerings are backed by a strong retail footprint. It set up 112 retail outlets (33 are Acer Malls and the rest Acer Points) covering 25 towns in 2004. The Acer Mall retails Acer desktops and notebooks along with competing products from other companies. Acer Points have a corner devoted to promoting the company’s products.
The response to these retail outlets has been encouraging. Customers walking in looking for a desktop PC can be convinced that paying 10 to 12 percent more for a notebook works out to be a better deal. Rajendran adds, “These retail outlets account for up to 40 percent of CPG’s sales. For notebooks, we have seen a quantum jump of 150 percent in retail sales.” A normal outlet that sold an average of three notebooks per month, sells four-five units per month after becoming an Acer Mall or Acer Point. Naturally the company plans to add another hundred outlets in 2005 focussing on B&C class cities. Rajendran says, “These small towns are equally important for us in meeting our business objectives.”
A Centrino notebook for Rs 49,999 Acer has slashed prices of its Centrino-based notebook, the TravelMate 4000 series, from Rs 53,999 to Rs 49,999. At that price it offers a full-featured notebook with 256 MB memory and a 40 GB HDD. For the first time, Acer had introduced a DVD-R or CD-RW combo drive and ‘802.11 b and g’ integrated wireless capability in its entry-level TravelMate notebook, the 2300 series.
The company bundled the DLP projector PD 113 series with the TravelMate 2300 for Rs 99,999. The combo can be converted into a home theatre by adding Dolby speakers. The bundling of Dolby speakers is done by retailers at an additional cost of Rs 3,000 to Rs 5,000 depending upon the wattage required by the customer. Rajendran says, “We feel that there is an opportunity and a market for projectors and notebooks, especially for the home and SMB segments and this offer goes one step further towards making us an active player in this market.”
Acer expects that post-budget, in March 2005, sales will peak irrespective of any change in duty structures. This is Acer’s big chance to gain a slot in the Top 3. Looking at its aggressive pricing strategy and expanding national retail footprint, Acer has a good chance of pulling it off provided it can recreate its OND 2004 magic.
Folio concept design
In Q4, 2004, Acer launched its new range of professional notebooks (TravelMate 2300 series and TravelMate 4000 series) based on a folio concept industrial design. The new dual spindle slim and light range of metallic coloured notebooks feature the Acer logo, a latch-less lock design and an Acer Fine Touch ergonomic keyboard with a 5-degree curve to make typing more comfortable.
AMD's 64-bit mobile processor-Turion
AMD is upping the ante in its fight against Intel’s Centrino. Its new 64-bit mobile processor, Turion supports the PowerNow battery-saving technology and brings 64-bit computing to the notebook arena. AMD says that it has tailored its upcoming processor family to suit highly mobile business professionals and consumers who demand reliable, high-performance notebook PCs with a long battery life, wireless compatibility, rich graphics and enhanced security. Sanjeev Keskar, country manager, AMD Far East India says, “Turion is a 64-bit mobile processor, which is expected to hit the Indian market as early as Q2 2005.”
Redefining the entry-level notebook
For an entry-level notebook, the new Aspire 1362 offers an AMD Sempron 2800 mobile processor, 256 MB DDR RAM, 40 GB HDD, CD RW-DVD combo, 15-inch TFT screen, folio design with pre-installed Linux and a one year international warranty. Acer is offering an additional discount of Rs 2,500 for students to increase sales in JFM 2005.