Acer has a lot of changes planned for 2013, according to Jerry Kao, associate vice president of the Taiwanese company's consumer business unit (PC Global Operations). After the launch of Windows 8 in October 2012 and the subsequent release of so-called hero products like the S7, the market will see that Acer is serious about morphing into a new entity, Kao claimed.
He listed the Iconia W500 and W700 tablets as two of many products that prove that Acer is no longer the company that it used to be. The firm now wants to capture mind share rather than market share, winning users’ hearts and adding substance to its “Exploring Beyond Limits” slogan, Kao said.
Kao also emphasised Acer's plans to aggressively implement features that users really want. Referring to touch technology, he claimed that Acer has the biggest share of the booming Windows 8 touch device market, before adding that “Windows 8 makes sense only with touch” because of the intuitiveness of its user interface.
Touch, Kao continued, is one critical technology that can truly change the user’s experience, which is why Acer has been investing a lot of human capital and financial resources in its development.
He underlined the fact that the company has already pre-ordered a lot of components and raw materials that go into the manufacture of touch technology, a move that will ostensibly allow Acer to weather any crisis that could be caused by sudden fluctuations in the supply of touch components. Supply constraints are going to last at least for another 12 months, which might limit the growth of some companies, he said.
As for Windows 8 sales figures, Kao confirmed what his boss, Jim Wong (below), mentioned in an interview with Digitimes. Windows 8 has not been particularly successful, not only for Acer but also for its competitors. He pointed to the timing of the launch of Windows 8 as one of the reasons why Windows 8 didn’t do as well as expected. Windows 8 was launched on 26 October, a window that, Kao said, is "not in line with any retail cycle" like the 'Back to School' or Christmas holiday periods.
As for Windows RT, he acknowledged that Acer hasn't launched any Windows RT devices because it feels the market is not ready yet and that there needs to be additional education to inform prospective users about the peculiarities of Windows RT, including the lack of support for regular Windows apps.
Kao also lifted the lid on another issue that’s hampering the growth of Windows RT - the cost of licensing. According to Acer’s AVP, because Windows RT is bundled with Office 2013, the end user ends up paying for two licenses rather than one, making it simply too expensive.
The third reason listed by Kao to explain the sluggish adoption of Windows RT is performance. The first generation of Windows on ARM devices is not powerful enough, especially when it comes to tasks that require massive hardware resources like touch interaction or playing videos. This could easily lead to a frustrating user experience made worse by the expectations users have when dealing with Windows.
Improvements are on the horizon, though, thanks to new SoC solutions from Qualcomm, Samsung and Nvidia. Accordingly, Kao confirmed that Acer will aim to launch a Windows RT device in the first half of 2013, possibly at this year’s Computex, and will have product announcements at Mobile World Congress next month.
Turning to tablets, there’s a clear difference between Windows and Android when it comes to usage, said Kao. Windows users use their tablets for productivity purposes, while Android owners are more likely to use theirs for media consumption. That also goes for pricing, with Windows 8 tablets tending to be significantly more expensive than their Android counterparts.
When asked about the possibility of a cheap Acer Windows 8 tablet (like Asus’ Vivotab Smart ME400C, which will sell for less than £400), Kao sidestepped the question by saying that Acer will not compete on price but instead will focus on what the end users want. He also mentioned the newly released B1, an affordable Android device that aims at the sub-£99 tablet market.
Moving on to Ultrabooks, the super-slim laptops have proved to be fairly popular because users like their design as well as their core feature offerings (like instant on and long battery life), according to Kao. Still, sales didn’t meet market expectations with cost being the main hurdle preventing higher sales.
Intel, Kao underlined, is still not flexible when it comes to the definition of Ultrabook, despite subpar sales figures. However, the market has ultimately forced Intel to alter its stance, which is why there has been a massive increase in the number of SKUs that boost Ultrabook-like features (like Acer's Aspire V3 and V5 or its Timeline X series) but at lower price points.
Compared to the way Netbooks were marketed years ago, Ultrabooks are totally the opposite, focusing on everything but the cost. Whereas Netbooks started at the very low end of the spectrum, Ultrabooks begun life as an expensive platform with the average selling price of the platform gradually falling down until it becomes mainstream. In a nutshell, Ultrabooks need to become more affordable to succeed. He also added that Netbooks (as well as bulky mainstream laptops) are well and truly dead now because of competition from tablets, hybrids and cheaper, slimmer laptops.
Speaking of cheap and slim devices, our conversation turned to Chromebooks, for which Acer was one of the launch partners. Kao said that Google was “reasonable” with Chrome OS but failed to elaborate, especially when we asked whether Microsoft or Google was the better partner. Acer has been working with Google on Chrome OS for around three years and although it might not be clear, Chrome was not aimed at productivity tasks.
Furthermore, Chrome OS has evolved a lot with Google compromising a lot on many key features (like always-online) but still doesn’t want to be a full on alternative to Windows. Kao added though that in the future, things might be different if Google decides to beef up Chrome OS features so that it looks, feels and performs like a real Windows alternative, which from an OEM point of view, would be an excellent thing.
Kao confirmed that Acer could introduce an ARM-powered, Chrome OS-based laptop in 2013 but will stick with Intel (because of development and bill of material) for now. Furthermore, he said that there are no plans for an Android-based laptop in 2013. Technically there’s nothing preventing Acer from doing it but as it stands, there hasn’t been any apparent demand from customers.
On the topic of desktops, Acer will focus on all-in-one computers, a form factor which has seen some significant growth fuelled by Windows 8. He also confirmed that the eMachines brand, which Acer brought in after acquiring Gateway, has been discontinued.
During our interview, Kao continuously referred to the new Acer, something that was born out from a massive management change that happened two years ago when its CEO Gianfranco Lanci stepped down and was replaced by the company's chairman, JT Wang.