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acer versus hewlett packard

the journal of Michael Werneburg

twenty-seven years and one million words

Toronto, 2011.09.29

In my marketing course we've been assigned a project to evaluate whether Acer should make a play for HP's PC unit.

It's a group project, and that's added the interesting wrinkle of learning how twenty year olds go about University studies these days. It seems that much is the same as it was when I was in school (and these kids were being born) but it's all faster and more distracting. We had computers but no Internet, phones but no mobile, and plenty of research sources but no as-it-happens sources (to speak of; you couldn't cite the TV and radio). Now it's possible for the kids to turn around a research task in class. But at the same time you see many of them spending an entire lecture on Facebook (of all pointless time sucks).

Anyway, the analysis I came up with was that Acer should avoid HP's PC unit like the plague. HP's been busily destroying value (e.g. $53B in the past twelve months, just in shareholder value) and failing to thrive in any sense. Its PC business was already a dangerously "me-too" and low margin affair before HP announced that it was getting out (without naming a buyer). Moreover, I've found several references to extensive damage done within the HP management structure by years of outsider CEO's meddling. It'll surely be non-trivial to unwind the PC unit from the rest of the mess. My advice for Acer would have been that the company look at the tablet unit within HP, which is the remnant of the recently purchased Palm. But that doesn't stand up to the interest that Amazon for instance would have in Palm, as Amazon's someone who can really run with the platform in the space they've already defined for themselves. I don't see Acer becoming ambitious enough in the space to try to outbid the likes of Amazon.

Gotta hand it to IBM, they realized that they had to pull the plug on their PC market and acted at the time when a) its products were still considered good and b) there were still potential buyers. HP's got no such option. Actually, and I say this as a student of marketing, I have no idea how HP's going to pull out of the spiral it's in right now.

rand()m quote

You are already naked. There is no reason not to follow your heart.

—Steve Jobs