Should Dell Buy Acer? Something to Think About

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With all the problems Dell has been having lately, this analysis comes as no shocker. Sanford Bernstein analyst, Toni Sacconaghi, laid out a plan for Dell to revive its fortunes by purchasing Acer. This would actually be a relatively cheap buy for Dell and the benefits may be well worth it.

A move like this could give Dell broader access to Asian and European customers where Acer does better, a stronger notebook line and a massive indirect sales channel. At the moment Dell does not sell in bricks and mortar retail stores, but Acer does, and this is something many analysts say Dell needs to move to doing.

I think customers need a change and maybe Michael Dell is now willing to back up Dell 2.0, which was designed to offer customers more of what they want (think &quot;Dell, purely you&quot; campaign). Whether customers want Advanced Micro Devices processors, improved product design, or Linux pre-installed options, Dell says it will offer them all.

They have already launched Dell Idea Storm, a website dedicated to users who want to leave feedback and opinions. The Tablet PC thread is getting lots of votes there and maybe if Dell ever does buy Acer, a Dell Tablet will be in the near future and not just a dream.

Buying Acer could be a quick fix for some of Dell's issues, according to Sacconaghi.

&quot;A combined Dell-Acer would enjoy leading share in nearly every major region of the world, strong products in both the notebook and desktop segments, and far-reaching distribution through both direct and indirect channels.&quot;

&quot;While we have no evidence that a Dell-Acer combination is being considered by either party, we do believe such a move could make strategic and financial sense,&quot; Sacconaghi wrote. &quot;We believe Acer could help Dell address many of the challenges it currently faces, but would represent a significant departure from Dell's historical track record of acquisitions and from its 100 percent direct selling model.&quot;

Although there is no evidence of Dell and Acer combining, it is still a good insight. Sometime mergers benefit more people than they hurt, but sometimes they don't, I guess that is something both companies would have to consider if they take Toni Sacconaghi's advice.

Read More (The Register)

 

 

 

 

Instead of buying acer, which dell (most likely will agree for a large some of money) looks forward to I think that there is a better solution. If Dell made a partnership with Acer so profits go 50-50. It would be cheaper on dell. It would also benefit us. Acers laptops getting a dell makeover. And dell getting an acer makeover (performance wise etc etc..)

 

Dell shoulda bought Acer instead of Alienware, I'll say that much. One thing I know is that Acer accepts low margins on its PCs in order to get retail stores to try and push them more. I don't know if Mikey Dell would go for that. Overall I say there's no way this will happen, but Dell does need to do something about HP kicking their butts and eventually they'll have to sell in stores IMHO.

 

analyst doesn't care about the future of the company, they only see the short term stock price gain... they always suggest someone to buy somebody or to close some division out, and that seldomly works for the long term... that's what's wrong with wall street's view of any company, it's simply just a justification to its stock price... i think mikey cares a lot more about his company's future to let some analyst sway his decision...

dell doesn't gain much from buying up acer... they just need to change their way of assembling notebooks in house since that's the bulk of the sales of their business... they were caught in a transition period where their own way didn't work and they didn't switch to the new way. HP didn't switch anything, their old way didn't work before but it's working for them now.

dell also need to expand successfully into consumer electronics to help themselves weather the changes of the pc markets... they have not put enough thought into dell's consumer product... they always allow some oem to build some cheap product for them to put their name on it... which usually doesn't work cuz it doesn't differentiate itself from the rest of the products... also i think the strategy of xps being the premium brands is not helping them out much... they should open that part up to discount again and push for enthusiasts loyalty instead...

 

Gah... That would suck... I actually like acer notebooks. I'd hate to see what Dell would do to them.

 

Well, people feared about Dell's takeover of Alienware. So far not much has changed for Alienware, except Dell's XPS has its resemblance to Alienware products . Oh, and Alienware's Homepage kind of looks like Dell's too now.

I think Dell seriously needs to rescue itself before it is obliterated into oblivion (hehe, I like that). Buying Acer's not a bad idea, they could profit in other strategies that they swore they would never undertake, like sell computers in big box stores like Best Buy. In that case, they would still make money selling Acers in Best Buy, while they still kept their 'rule' of not selling Dells through big box stores and resellers.

 

that would be stupid for dell and acer. acer is the 4th biggest computer manufacture world wide, it is going to cost a huge sum of money to buy them out. the only thing they would get out of it is huge channel network.

also, I like acer but don't like dell's, so my next system would be an HP then. so dell will not benifit from this at all because I will get a diffrent brand. and so will many other people.

Dell, my Advise Leave Acer Alone!!!!!!!!!!!!!!!!!

 

That would be a solid purchase, acer is strong in mainly stores only (especially in US). And they have a huge foothold in Europe and in Asia as well. All of these qualities Dell doesn't have. That would be a very smart move on Dell's part.

I actually didn't think Dell had the financial power to buy Acer.

 

That's what I think too...Dell has around $10 billion cash in hand, which isn't even close to the size of Acer...

 

I severely doubt that Dell has the kind of cash to buy Acer.

And I really don't think Acer investors would take Dell stock as an option.

 

Yeap, Dell probably can't buy Acer. Or all of Acer, as they are a huge corporations with manufacturing plants for literally almost everything. As well, Acer has 'broken' away parts of themselves into different parts, such as AUO(The LCD company), BenQ(For 'higher quality' goods of the same things, like notebooks, fridges, LCDs, etc.) Winstron(which is an ODM), just to name a few things.

 

I think we all recall what happend to HP after they acquired Compaq.......


Let Dell buy Acer

 

Are you saying you want them to loose more market share and even more money at the hands of HP?

Hmm.

DELL NEEDS TO BUY ACER!

 

Or Acer buy Dell haha

 

OMG - DELL GO TO HELL...

If they bought Acer, would Acer quality go down ?

Like mr THINKPADS cuz of LENOVO!!

.... Steve says

ACER buy DELL ...

World becomes a better place..

Steve

 

Would that be possible?

 

Hahaha, good question. I'd rather have market competition though, even if there would be short term benefits to the consumers. There are only three things I like about Acer really: in-country Tech Support (as in Customore Support is in Texas with usually coherent staff), performance for the price in the mid-range segments, and relatively little bloatware installed by default. A Dell acquisition would effectively eliminate two of those niceties (guess which).

And like the others say, I doubt even Dell has the financial capability to buy out a global corporation like Acer.

 

Oh sure, Dell would make me pay $1,200 for the Acer in my sig that I only paid $850 for just cause it has 2gb ram and a cam on the screen.

I hate dell's way of pricing systems. Well actually they don't price systems, they price specs. And they price Specs down to every little details. Want 1 more gig on your harddrive? Then pay Dell 7 more dollars for each gig.

 

The aspire and the inspiron are both made by compal.

I mean its basically the same thing, one is a us mostly mail order company and one is in retail stores.
So if Dell and acer combined instead of being almost the same thing they would just be exactly the same thing, and each aspire and inspiron would be $20 less.

I mean, the aspire is usually lighter than the inspiron. The inspiron is very thick and tougher. But theyre so close to same thing same color same parts.

I mean it might be fine for us as consumers. The thing is, I dont want an aspire or a inspiron so I cant imagine how it would affect me.

The travelmate is not like any dell. Its a grade above any dell.

 

Dell should just cash out while it's not in chapter 11 and give the money back to its investors. That's what Dell said about Apple 10 years ago, but Apple's sales more than doubled and Dell's, well, didn't.

All kidding aside, Dell and Acer would make perfect merger-mates. Dell and Acer both pride themselves in making crappy products that are cheap.

Whatever, doesn't matter to me. I hate both companies and I'd never buy from either. So Dell and Acer can both go to hell for all I care. I'm just going to continue buying my macbooks because I like Apple.

And no, it's not possible for Acer and Dell quality to go down any further...they already hit rock-bottom.

 

Both Dell and Acer make crappy yet functional notebooks. Mac's suck and have terrible reliability as well. Apple is the most overrated product in America today.

Dell used to be the price leader. A few years ago Dell got the bright idea to jack up their prices and profits. They incorrectly assumed their strong brand name would justify 25-45% price premiums over competitors. Those were the numbers floated around by I think the gartner group a couple years ago.

If Dell wants to know why their profits and sales are lagging, they only need to look at their pricing strategy.

Acer on the other hand pulled an old Dell and started selling laptops for cheap. They've had huge growth number targets and they've come close to hitting their sales numbers over the last couple years.

HP did the right thing by firing the broad who was ruining HP. Dell cannot be saved from their own greed.

My guess is that Dell paid a guy to suggest the purchase of Acer to boost Dell's stock. I don't think Dell will buy Acer or even try.

 

LOL,

Did anybody read the article? I think it mentioned somewhere that Acer is going to cost Dell 'only' $4bln. Or at least that's the way I understand it.

That aside, I really don't think buying Acer is a sure thing of reviving regaining its market share. It is probably a little bit better than a 50-50 chance. Although Dell would gain market share in Europe and Asia by buying Acer, but there are costs that have to be taken into account too.

Besides, like some one already said, for the long term, it is not necessarily a good thing. For the short term it has a bigger chance of being successful.

The problem is with Dell's customer service and quality. And maybe a little bit of Macs and HP and Acer getting better in both of those areas. If they can fix those two problems in my opinion they should regain some of the market shares they lost.

 

Merging of 2 big companies like Dell & Acer merge would mean in the long run less competition and fewer options for us consumers , specialy when Acer was becoming the other "cost effective" option for Dells notebooks .

No matter what they claim , Dell "isn't purly for you" , its purly to make more money ( like any other company ) , so you can be pretty sure that the *top priority* of any buyout or merger isn't to make you better notebooks but to improve the bottom line , often at your expense .

Just my humble opinion .

 

The problem with Dell is that they have just become too hum-drum compared to the other manufacturers. I think Dell should just stick with the business aspect of notebook computing and be content with the profits that can draw. That's clearly what they do best. Heck I have one from the company I work for. In fact, I bet that there are many, like me, who associate Dell with work and so the idea of buying a personal Dell would only remind me of work, therefore, I bought an ASUS. It's that 'stick it to the man' attitude that will always eclipse Dell sales in the home buying PC market. Same thing goes for Lenovo, IMO.

The part about buying out Acer is just plain dumb. IMO, Acer makes an inferior product, particularly when it comes to build quality. Dell should just keep making better products and squash Acer with that. Competition is good for the consumer. Personally, I think that Dell should get out of the home and gaming notebook markets altogether leaving that soley to the new Alienware division. I think many people are attracted to the idea of owning an Alienware product, but the quality has been suspect. Here is where Dell's history of good quality can market Alienware and cover the entire notebook market. Buying Acer to eliminate them as a foe is utterly weak!

 

LMAO!

One of the best lines I've ever read here.



I'm gonna add it to my signature, with credit to you. If that's okay with you, of course.

 

if dell buys acer, then good news for dell users especially in the asia-pacific area like the philippines. dell has no local service or support centers yet in the philippines while acer has lots of it around in the capital manila and even in cities in the provinces. it's ironic because dell just recently set up a big dell call center in a big new mall in manila but dell itself has no service centers in the philippines. that's why few people here prefer dell because of the lack of local service/support centers.

 

ya this is an extremely complicated industry.

Acer was orignally a manufacturing odm. They were the second largest in the world.
They manufactured the dell inspiron actually. Texas instruments travelmate.

Now acer is completely fabless. They sold the manufacturing plants and they are just like dell, a retail entity. They own controlling interest in some of the manufacturing arms. Like wistron, mostly just makes acers.

I mean, whatever dell would be buying is extremely complicated. Thats all I wanted to add lol. Acer is just um.... blue sky its just the actual name brand and the marketing channel.

 

Since when did Dell start making quality computers? They use the cheapest components in both laptops and tops. I think Acer makes higher quality laptops than Dell.

 

If Dell wants to do better, instead of buying another company maybe they should improve their customer service.

3 years ago I bought an expensive desktop from Dell. I had problems with the hard drive. After spending 17 hours on hold and talking to people who don't speak English, cant understand what I say, and follow flow charts to diagnose problems I brought it to a local computer store and they fixed the problem with a $8 cable.

When I needed a new desktop last September guess where I went? The same shop that fixed my new Dell.

Now I need a laptop, and the only company that I would consider besides a brick and morter store (with a 3 year extended warranty) is Gateway, because their customer service center is in the US.

Once you have a couple bad experiences with customer service, the money you save online isn't worth the hassle if anything goes wrong.

 

If dell wants to buy acer acer must be willing to be acquired by dell, otherwise it will be a hostile takeover atempt which if proves to be unsuccessful will cost a fortune for dell.
I seriously doubt that acer's management will respond positively to a dell's acuisition attempt

 

Dell made 50 billion last year , they make 40-80% profit on everything that they ship. Dell as no debt.

HP sold more units but made less profits , due to there wide range of offer and there R&D expanse and there accumulated debt.

Acer could be had for 4 - 8 billion , a bargain for a company like that. What is really interesting is there design team ( Ferrari laptop ) and there market store distribution. Combine that with Alienware design team.

When Michael Dell made is Apple comment Apple was Bankrupt in Debt and without Steve Jobs. What saved Apple was Steve Job and the iPod + iTune witch also run on windows. You don't tell you shareholder to sell your share when you make so much profit.

Come to think of it after acquiring Acer they can make Apple an offer of 5 million , yes that's an M , on its computer division and Mac OS X. Just so that the price of Apple share drop to the low 10$ and they be able to acquire it.

Buy 25 Billion of share value of Apple to acquire Mac OS X and in doing so drop the price to 2 - 3 $.

Make an iPod + iTune killer sell it at cost and sale music at 75 cents , Dell can afford to loose money

Or buy Adobe at 30 billion , stop them from making Apple Mac OS X version , and offer the full version software at +10% from cost on your own hardware.



Its Michael Dell , the Return of the King , he will do what he was born to do !

( Yes I watch too much movies )

BTW a lot of people where saying AMD - ATI was impossible too.

Everything can happen ...

 

Actually, Dell only made $3 billion last year in profits.

Their revenues were $55 billion.

And that's based off of the Fortune 500 list for 2006 (reported for fiscal year 2005).

Dell's 2007 listing won't be as good as 2006's, since fiscal year 2006 wasn't too great for Dell.

 

http://money.cnn.com/magazines/fortune/fortune500/snapshots/406.html

Dell is one of those rare pure profit company , so yes , your right they declared and paid taxes and dividend on 3 billion , but I doubt that they spent 52 billion in operation expanses only. I know they spent it on acquisition. Like Alienware.

Time will tell ...

 

Jon-Michael: totally fine with me.

Oh yeah, and because Apple's just going to lay down and take it. Yeah right...Steve Jobs isn't dumb, and neither is the board of Apple. Dell won't be able to acquire Apple. Dell isn't interested in making premium products. Dell is interested in screwing its customers for its own profit, and it's doing a terrible job....anyway Apple's market base doubled in 2006. Apple's doing really well.

 

according to Google finance Dell's profits after taxes were about $3.5bln. Apple's profits after taxes were about $2bln. How big is Dell compared to Apple? I thought so.

By the way Apple has about 16500 employees while Dell has about 78000. Dell should be doing MUCH better, even when you factoring the law of diminishing marginal utility.

 

You know thats not exactly true. Alienware has changed odms away from clevo to arima for the aurora notebook since the dell takeover. What they are doing is changing the alienware notebooks to unique in the NA market, only models that alienware has