Acer (OTC:ASIYF) is not done with tablets. New models will be released in 2012. The company is apparently going to continue making Android tabs despite a slow start and reports stating the contrary. Acer’s founder, Stan Shih, likened it to the troubles the company experienced with early PC notebooks.
Modern tablets are not the same as notebooks. They’re completely different beasts with totally different markets. Succeeding at selling tablets requires completely different tactics than selling notebooks. Acer’s tried-and-true strategy of racing others to the bottom will not generate the same level of success.
Acer became a household name through selling relatively inexpensive computers. This generated a lot of sales but also a horrible reputation. Until just recently, Acer products were often looked upon as being the low hanging fruit of the computer world. They’re easy to obtain although not that tasty. But the process worked for Acer as the company surpassed Dell (NASDAQ:DELL) in 2009 to be the second largest computer maker behind just HP (NYSE:HPQ). Cheap, grey boxes sell.
Nondescript tablets are not the way of the future. Consumers either want an inexpensive tailored device or the iPad. Thirdly, as proved by Asus, a tablet designed by geeks for geeks is also another way. Anything in between is a non-starter. Acer’s Iconia Tab devices checks all the theoretical right boxes: Tegra 2 platform, the latest Honeycomb install, a good screen, dual cameras, and plenty of expansion ports. But if you’re shopping for specs, there is no reason to buy an Acer tablet over, say, a Asus Transformer or even a Samsung (OTC:SSNLF) GalTab.
In the PC race, Acer simply cut corners and took shortcuts. It worked. But there aren’t many ways to do that with tablets. Only by loading the tablet with sponsored bloatware could the manufacturer theoretically support lower MSRPs — not that there’s that much room to work with anyway. Shin stated that the company will simplify its product development and reduce the amount of tablet and smart phone products.
Look at the current state of Android tablets and it’s clear Acer is in for a hard fight ahead. Amazon (NASDAQ:AMZN) and B&N (NYSE:BKS) have their content distribution. Asus is building a tablet for the very niche geek crowd while Samsung and Motorola (NYSE:MMI) have their massive marketing might. Acer, on the other hand, doesn’t have anything but it’s reputation as a cheap computer maker which is a huge hindrances as tablets are positioned as premium devices. Acer is in serious trouble if it believes it can compete at a high level.