Acer to Battle Dell in Direct Sales – Targets $10 Billion by 2006

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Taiwan-based Acer said yesterday it will battle Dell and other giant rivals on sales of IT products with a new channel business model that can help Acer garner 40% growth in sales every year for the next few years.

Under the new strategy, Acer aims to boost its sales to US$4.5 billion (NT$153 billion) in 2004, up from US$3.3 billion projected for this year, said sources at Acer. The company s annual revenues are expected to reach US$7 billion in 2005 and US$10 billion in 2006.

Acer will continue to stick with its channel strategy by selling IT products, including desktops, notebooks, monitors and other products through distributors and stores, against the direct approach championed by Dell, said Acer chairman and CEO Stan Shih.

Other US giants such as Hewlett-Packard (HP) and IBM are likely to follow Dell s step to expand direct marketing in the near future, Shih noted.

Acer s new channel business model aims to distribute the advanced, innovative IT products built on Empowering Technology through a friendly, reliable e-Caring approach, Shih said.

Empowering Technology means to integrate relevant technologies and software for manufacturing IT products and household appliances into a series of brand new products, while e-Caring means to offer consumers affordable products and services that meet their requirements, Shih said.

Under the approach, Acer will start marketing a series of digital home entertainment, or information entertainment technology (IET) products, including the Acer Aspire E PC, E Box, E TVD, E Tablet, E 2Go and E Radio, in April 2004.

The E TVD is a LCD TV with Internet functionality, the E Box allows users to transmit and receive photos, music and other PC content under a wireless environment, and the E Radio is a smart wireless device that can play music from PC or Internet, and receive Internet radio and AM/FM broadcasts. The E 2Go is portable device that allows users to receive real-time digital content from any place, at any time. All products can be connected to each other, according to Acer sources.

With the new sales strategy, Acer aims to boost its sales in the US from this year s projected US$300 million to US$600 million in 2004, US$1.2 billion in 2005 and US$1.8-2.0 billion in 2006, said the sources

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