Acer signs OEM deal with Dell

Taiwan's Acer Group has signed an original equipment manufacturer (OEM) contract with Dell to produce desktop and notebook computers, an Acer official says. Acer will produce about 1.3 million low-end computers for $US929 million and expects to begin shipping the computers in the first quarter of next year.

Taiwan's Acer Group has signed an original equipment manufacturer (OEM) contract with Dell to produce desktop and notebook computers, an Acer official says.

Acer will produce about 1.3 million low-end computers for $US929 million and expects to begin shipping the computers in the first quarter of next year, says Bruce Brough, a spokesman for Acer America Systems Group. A Dell spokeswoman at company headquarters refused to confirm the deal.

The deal is the second of its kind that Acer has signed recently with a major computer vendor. Acer said last month it would buy $US8 billion worth of hard drives, chips, display technology from IBM for use in its server, desktop and notebook computers. Acer will also be selling IBM products through its sales channels. Acer and IBM also have a previously existing "multi-billion" agreement under which Acer manufactures PCs sold worldwide under the IBM brand.

Acer's low manufacturing costs allowed it to compete successfully against Taiwanese rivals such as Quanta Computer, Mitac International and GVC, Brough says. "Acer is quite vertically integrated," he says. "It makes semiconductors and peripherals. In fact, it is one of the few companies that makes almost all the products it is selling."

Acer can be reached at www. acer.com/. Dell is at www.dell. com/. IBM can be reached at www. ibm.com/.

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