Acer to build PC appliances in many forms

Add 'XC' to the list of computing acronyms.Taiwan's maverick Acer Group next year will offer application-specific computing appliances, dubbed XCs -- the X representing unlimited possibilities -- that will be much cheaper and easier to use than PCs, according to chairman and CEO, Stan Shih. And, while all XCs will use Intel processors, some will forsake Microsoft Windows for an unnamed 'small operating system' .

Add "XC" to the list of computing acronyms.

Taiwan's maverick Acer Group next year will offer application-specific computing appliances, dubbed XCs -- the X representing unlimited possibilities -- that will be much cheaper and easier to use than PCs, the company's chairman and CEO, Stan Shih, said at the Asia Pacific IT Summit.

"Only an estimated 5% of the population know how to enjoy the PC, and the remainder find technology too complicated or cannot afford it," Shih said.

Leveraging its manufacturing expertise and using standard PC components, Acer will offer XCs for a variety of markets and applications next year. The XCs will be based on the X86 microprocessor architecture and cost between US$200 and $500, Shih said.

XCs iterations will include the KC, GC, STC, HBC, EC and INC -- that is, kid computer, game computer, set-top computer, home banking computer, education computer and Internet computer. The first XC, aimed at children, is being produced in cooperation with a Japanese vendor and will come out early next year. The device will include a CD-ROM drive and an X86 processor and will be used to run entertainment and education software titles, Shih said.

While Intel will be a major part of Acer's future XC business, Microsoft will play a lesser role, Shih said. Depending on the applications that will be packaged with the various XC models, some will run Microsoft's Windows operating system, while others won't.

"Windows is very expensive," Shih said. He added that some XCs will run a Web browser, while others will use a "small operating system" that he declined to describe in more detail.

The main criterion for selecting the operating system will be cost and ease of use, Shih said. "Consumers will not have to learn how to use this XC more than they would any other appliance."

XCs will present new opportunities for software developers, who will make money once a volume of XCs are sold and in use, Shih said. Similar to NCs, some XCs -- such as the home banking model -- will be linked to the Internet, while others won't, Shih said.

Since XCs are application-specific and not intended to be PC-like, multipurpose devices, they will be much easier to use than PCs. They also will not require the existence of a solid telecommunications infrastructure, which is a prerequisite to make the NC a success, Shih said.

Shih predicted that Acer's XC business will make up about 5% of sales three years from now and will grow exponentially, reaching a level between 10% to 20% in five years. But PCs will remain Acer's core business, Shih said. He added that XCs will compete with both personal and network computers. Early next year Acer will come out with its own NC, which will be produced in the Philippines, Shih said.

Building XCs will allow the Acer Group to leverage its manufacturing expertise. The company is building most of its own hardware components, including RAM, ASICs, keyboards and monitors, making it easy to keep production costs down, Shih said. In addition, using the built-to-order concept, XCs can be produced through "mass customization" for specific demographic segments of consumers, Shih said.

However, Shih said XCs are not just a new way to make money for Acer, or other manufacturers. Rather they represent an opportunity to bring computing power to more people, especially in Asia, where a much smaller share of the population is exposed to PCs and IT.

Shih wants to use XCs to reach a proportional balance between the number of computer users in the East and West and use the devices as an educational tool. XC will be the 21st century tool for Asians to promote education and thus make a larger contributions to the next era of human civilization, Shih said.

Shih made his remarks at the Asia-Pacific IT Summit. The Summit is hosted by the U.S. National Committee of the Pacific Economic Cooperation Council (PECC), an accredited, independent observer body in the Asian Pacific Economic Cooperation (APEC) forum.

The IT summit preceded the ministerial meeting of APEC countries opening tomorrow in Vancouver, British Columbia. PECC is an organisation mainly devoted to creating ideas and fostering dialog between industry and government officials.

Acer, with headquarters in Taipei, Taiwan, can be reached on the World Wide Web at http://www.acer.com/.

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