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Tuesday, Feb. 15, 2011
Acer antes up in Japanese market
Ever since it began seriously competing in Japan a few years ago, Taiwan-based computer maker Acer has been expanding its presence in a market long dominated by domestic brands.
"To become the worldwide No. 1, the Japanese market is essential," said Bob Sen, managing director in charge of the Japan and Korea region at Acer Inc., in an interview with The Japan Times last month.
Acer commands the second-biggest share of the global computer market after Hewlett-Packard Co. in terms of total shipments.
In 2008, the Japanese computer market saw the rise of such Taiwanese makers as Acer and AsusTek Computer Inc., which penetrated the market with a small portable PC called a netbook.
While it has been somewhat difficult for overseas makers to win the hearts of Japanese customers, who tend to value top-performing products customized to their tastes, Acer is growing and wants to crack the top five in Japanese market share by the end of this year.
It wasn't so long ago that Acer was practically invisible.
According to Tokyo-based MM Research Institute, Acer only shipped 100,000 units in 2007, keeping it out of the top 10.
Yet by the following year it was eighth, with 455,000 shipments, thanks in large part to the netbook.
With 786,000 units shipped, the company kept its eight-place ranking in 2010, chasing the top five of NEC, Fujitsu, Toshiba, Dell and HP.
In the segment for PCs for individuals, however, Acer managed to grab fifth place.
But the company is still struggling to penetrate the corporate market, which accounts for about half of Japan's overall computer market. To crack the top five in overall market share, the company must strengthen its corporate presence, Sen said.
Acer's strategy is to provide global models at global standard prices to consumers who have become accustomed to the Japanese standard.
"We have been saying that Japanese computers were too expensive. We wanted to introduce the worldwide standard price," Sen said.
Indeed, domestic makers have tended price products higher than overseas makers, as those models are often targeted only to Japanese customers and specially made for the Japanese market.
Acer's global strength is reflected in the size of its shipments.
While Toshiba has the largest global share among Japanese makers, with about 13 million units shipped annually, Acer ships about 30 million units worldwide, which allows it to sell at lower prices.
For instance, the company recently released a 3-D-ready 15.6-inch notebook PC for under ¥100,000 and a 11.6-inch model priced roughly ¥20,000 less than similar notebooks offered by Toshiba at some online stores.
Sen said Japanese makers have been able to succeed by focusing only on the domestic market, but this is becoming increasingly difficult to do because the Japanese market is shrinking as other markets, like China, grow.
"There is a gap between the worldwide standard and Japanese standard. It will be more difficult to keep the Japanese standard, as it would be inefficient to make products just for Japan," said Sen.
Acer's Japan branch was established in 1988, and until 2000 was mainly manufacturing computer parts for other makers.
The company shifted from a manufacturer to a brand company in 2000, according to Sen, adding that the Japanese market was a low priority until around 2007 or 2008, as the company first went after the markets in the U.S., Europe and emerging countries.
This year, in addition to promoting its cost-effective devices and actively pursuing the corporate sector, Acer also aims to attract customers with tablet computers and eventually smart phones.
Sen noted that the computer market in 2010 overall seemed slow in Japan.
"If you looked at TV sections at electronics stores, you'd see people lining up (because of the government's Eco-point subsidy). You wouldn't see that at computer sections, and except for Apple's iPad, there weren't really any hit products. In that sense, I thought last year's computer market was not very animated," said Sen, a 42-year-old Taiwan native, who has been working for Acer Japan since 1998.
Sen said that this year, new computer products like slates and tablet computers are taking off and many companies are expected to update to Windows 7, Microsoft's latest operating system.
Calling 2011 the year of the tablet computer, he said Acer may announce its own tablet before April and noted that many other makers are also gearing up to challenge Apple, which is dominating the market with its iPad.
He also stressed the importance of having attractive content and usability.
"The biggest difference between existing computers and tablets is that existing computers with keyboards are rather for people to create content, while tablet computers are for consuming content. Because of that difference, it is nonsense to just focus on hardware when it comes to tablet computers," said Sen.
"The user interface and how easily it can link to content are important. And our company is putting resources to those aspects. While cost-effectiveness is a matter of course, we'd like to promote what users can do with our tablet computer," Sen said.
As one example, he mentioned linking through a network for users to share content on different devices like tablets and smart phones.
He said Acer is interested in entering Japan's rising smart phone market. "There may be a chance this year to make an announcement about smart phones," he said, adding that the decision is still up to the carriers.
Acer has already released smart phones in other countries including the U.S. and Australia.
Sen also said Acer plans to provide products that will "propose" something new to consumers, although this does not mean innovating new technologies.
Rather, Acer will do so by spicing up existing technologies.
For instance, Sen said that while 3-D technology has existed for a long time, it wasn't readily available to general consumers because of the expense.
In response, Acer released 3-D-ready computers for under ¥100,000, Sen said.
"The tablet computer is one of those products. As a non-iPad maker, Acer will propose the joys of using tablets," he said.