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Thursday, November 16, 2006

Another Problem For Dell: Acer (DELL)(HPQ)(WMT)(AMZN)

Unlike most other PC manufacturers Acer is in high-growth mode. Acer's shipments last year went up 22%, a rate more than double the industry's. Acer's growth in the third quater of this year was also better than its rivals. In short order, Acer may pass Lenovo for third place among PC companies, putting it behind only HP and Dell.

Acer, based in Taiwan, has a fairly low cost base. This helps it sell inexpensive machines in markets like China and India.

But, what about the US. Acer now runs inserts in major US newspapers. Acer's share here is 3.3% but it has been rising. The company now has reselling arrangements with Wal-Mart, Best Buy, Office Depot, CDW, and In other words, Acer PC are now widely available in the US. Although the company has not set up a direct marking internet operation in the US, it would not be surprising to see that over the next year.

Dell did not need to worry about anything else, but it has not worked out that way.

Douglas A. McIntyre can be reached at He does not own shares in companies that he writes about.

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