Battle of the Agressive Chinese Computer Brand Buyers

Includes: GTW, LNVGY
by: Yankee Group

By Carl Howe

I wrote back in 2005 that Chinese companies have done a remarkable job of recognizing undervalued brands from US companies. Well, yesterday morning's headlines brought another proof point to that claim with the news that Taiwan's Acer is going to buy Gateway Computer (GTW). Gateway has fallen on hard times in recent years, but was still relatively well-known here in the US. And since it had the right of first-refusal to buy the parent company of Packard Bell, the deal also thwarts the hopes of Chinese computer-maker Lenovo (OTCPK:LNVGY) to purchase that brand. This deal just proves how aggressive Chinese companies are becoming in trying to establish global brands -- and how rough and tumble the commodity computer business has become.

I will pose one question to both Lenovo and Acer marketers: how are you going to differentiate your products beyond price? Unless Lenovo and Acer start focusing on differentiated products, they are in a race to drive each other out of business. Brands must stand for something other than low prices -- and the time to find out what that is before the battle of the low-priced brands gets completely out of hand.