Dell, Lenovo and Acer Scramble For Relevance

Dell Inc. (DELL) continues to stumble along and there is no sign of its return to world-beating status. Lenovo Group Limited (LNVGY.PK) and Acer Inc. [2353.TW] have exchanged the number three and number four positions.

While the respective press releases will spin the relative merits of the position changes, the Asian boardrooms cannot be happy. They are not interested in lower tier status.

Everyone is showing up on everyone else's home turf with a cheap product designed to inflict financial pain first and meet end user requirements second.

If Dell continues to fail at crafting a compelling reason for continued investment, watch for either Lenovo or Acer to take over Dell. Enormous synergies and stopping the pain of hyper competitive price competition will make a great deal of sense for all involved.

Dell's stock is not really catching fire and the jury is still out on too many issues. Watch Dell's cash generation (if you can guess at the numbers). As cash generation slows, panic will set in and the vultures will circle.

Comments

[rajeev bajpai:]

Lenovo is definetly struggling in their endevour owing to their execution issues in rest of the world and the onlysaving grace for them is China. Dell has changed the strategy since their existence by embracing the two tier distribution. This should compliment their direct business and make them gain a few marketshare points in the SMB segment. However Acer continues to demonstrate their fast and better execution then both lenovo and dell which is also seen in their share price.

They have a good product portfolio. On the only growing segment in the PC industry (Netbooks) they have a commanding market share (now in excess of 30%) and by way of their continued expansion in the notebook PCs they have displaced Dell as the number 2 vendor. They have also launched smartphones post their acquisition of E ten , which is again the only growing segment in the mobile market.

May 14 04:51 AM