Thursday, February 24, 2011

Dell (DELL), Hewlett-Packard (HPQ), Acer to Battle it Out Over Business PCs

Acer, best known in the U.S. as a maker of low-priced consumer PCs, is getting ready to sell storage and x86 commodity servers to U.S. businesses.

The Taiwanese company, which has sold servers and storage in Asia and Europe for years, says it will initially sell 16 servers in the U.S., including tower, rack, blade, and rack multi-node models. The systems will be available with either Intel Xeon (NASDAQ:INTC) processors or Advanced Micro Devices' Opteron (AMD) chips. Acer will resell Hitachi storage products.

Acer has offered an extensive line of consumer PCs for quite awhile in the U.S., competing with other vendors primarily on price. Acer had a strong run through 2009, because of the popularity of its mini-laptops, called netbooks, during the height of the economic recession. Last year, however, consumer spending on PCs slowed with the rising popularity of tablets, particularly the Apple iPad (NASDAQ:AAPL). As a result, Dell in the fourth quarter of last year took back the title of the world's second largest computer maker in terms of shipments from Acer, which fell to number three, according to IDC. Acer in the quarter saw shipments fall 15% year to year.

Selling servers in the U.S. will add the business PC market as a battleground between Acer, Dell (NASDAQ:DELL), and Hewlett-Packard (NYSE:HPQ). To compete effectively, Acer will need more than low prices. It will also have to provide onsite service.





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