Acer CEO: US PC Makers doomed

HP and Dell, the largest and third-largest PC manufacturers in the world respectively, are powerful players in the world PC market. However, their sales figures have slipped badly during the recession, with Dell taking the heaviest loss.

At the same time, the recession has seen the rise of Taiwanese manufacturers like AsusTek and Acer on the back of strong netbook sales. This development has led Stan Shih, CEO of Acer, to declare that the US manufacturers may go the way of the dinosaur.

In an interview with Taipei’s Commercial Times, Shih said that “The trend for low-priced computers will last for the coming years.  But US computer makers just don’t know how to put such products on the market… US computer brands may disappear over the next 20 years, just like what happened to US television brands.”

Coming from any other company, this would sound like typical corporate rhetoric. But Acer might be on to something here.

Acer, more than any other manufacturer, represents this potential changing of the guard. In 2009, Acer passed Dell to become the world’s second-largest PC manufacturer. In fact, their sales figures suggest that they will pass HP in 2011 to become the world’s largest PC maker. This growth has largely been sparked by their low-cost machines.

In addition, Mr. Shih seems to have hit on a very interesting conclusion. He believes that Taiwanese manufacturers are putting the squeeze on Dell and HP on the low-cost end of the market. At the same time, Apple’s been taking Dell and HP’s market share on higher-end PCs.

In order for Mr. Shih’s prediction to come true, the Taiwanese manufacturers will have to establish a reputation for quality product. It’s much harder to sell a product on its price when the economy is not in a recession. While Acer has a decent reputation among the budget-conscious set, and AsusTek has a following with more savvy users, this prediction will be contingent on developing a broader appeal than they already have.