Acer sides with Microsoft over network PC connnection

Acer chairman and chief executive William Lu is betting on the NetPC, Microsoft's cut-down Windows alternative to the so-called thin client Network Computer (NC). Lu, in Auckland for a meeting with his local business managers, questions whether the NC will create another major trend.

Acer chairman and chief executive William Lu is betting on the NetPC, Microsoft’s cut-down Windows alternative to the so-called thin client Network Computer (NC).

Lu, in Auckland for a meeting with his local business managers, questions whether the NC will create another major trend.

It’s not that he doesn’t want to support it, but he believes several factors will inhibit its acceptance as a mainstream product.

The NC’s price will be more than its original target price of $US500 and closer to $US1000, he asserts.

He believes there is also an unresolved issue of bandwidth for users working off an NC server, he says. And some users might be reluctant to place their files on their servers.

“For this reason I think the NC will face difficulties. But the NetPC concept will be more convenient for end-users. These will be able to connect to the Internet as well as being able to operate as standalone units.”

Acer is already producing a cut-down PC which it is marketing in poorer countries including India and China. Lu says both applications and cards can be installed on these machines, making them useful in education or for Internet connectivity or banking. They sell for just under $US1000.

“One of the difficulties for the NC is to make it popular — at the moment they offer little motivation for hardware vendors.

“The NC cannot be reduced to $US500, so if it goes up to $US700 or $US800, what would be its advantage? If it is to succeed it will need an infrastructure for delivery as well as technical support and services.”

Lu says Acer is now ready to move aggressively in the New Zealand market after last year’s long process of self-analysis and reorganisation.

The company will be looking to take advantage of its acquisition of Texas Instruments’ notebook business, although it will continue to retain its current dealers in New Zealand. In the US, Acer has not been strong in notebook sales, he says. Analysts have suggested that its sales channel has not been adequate. Lu says the TI acquisition will enable Acer to combine the strengths of the two companies.

“It’s a little different in the Asia-Pacific area, where both companies have an equally strong presence in the notebook market,” he says. “Our intention is to maintain the two products as long as the marked needs them, but the TI teams will merge into the Acer business as independent product centres.”

Looking to the future, Lu says Acer will continue to focus on what he describes as “fresh” technology. Notebooks and PCs are among the first to use the new multimedia chips from Intel, and new products will feature 3D graphics ability as well as Intel’s videconferencing technology. Digital video disks (DVD) will be installed once their prices falls to a target figure of $US150. They currently cost about $US300 to manufacture.

Waiting in the wings is a DVD player that will fit in a television set-top box and provide Internet connectivity as well.

“By the year 2000 we’ll be more than a PC company — we want to be perceived as an appliance company,” Lu says. “We see two major directions — one is to provide more hardware and system software solutions to corporates; the other is to offer consumer technology that penetrates a wide range of appliances.”

Also in the future is large flat-screen display technology using liquid crystal or gas plasma technologies.

In the meantime Acer is ready to build in its strengths in the New Zealand market, starting with education and personal computers for business. The company has established its East Tamaki warehouse and assembly facility in readiness for its anticipated demand.

Acer’s server business has a small hold in New Zealand with installations at the Ministry of Agriculture and in the armed forces.

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