Acer won't do DVD this year.....................
techweb.com
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August 04, 1997, Issue: 178
Section: News
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Acer exec cites 'no performance advantage for Win 95 users' -- Surprising start to Pentium II race
By
A CRW Report -- San Jose, Calif.-As top-tier vendors prepare to promote Pentium II PCs to consumers amid the hum of Intel's promotional machine, one retail stalwart, Acer America, said consumer research led it to forgo not only Pentium IIs, but DVD-ROM, until next year.
The decision is significant given Compaq Computer, IBM, NEC and Hewlett-Packard's quickness to incorporate those technologies, and the force of the Intel juggernaut, which maps the Pentium II as dominating the market next year.
"At this point, the Pentium II has no major performance advantages for customers running Windows 95," said Mike Culver, vice president and general manager of Acer's consumer products division. As for DVD, he said, "We'll have it when we can fully test it with Windows 98" next year.
Culver said Acer plans to more than double its distribution to around 4,000 storefronts within the next 60 days, on the heels of its new strategy that focuses the bulk of its line at less than $1,500.
The strategy is aimed at what the company believes are the true needs of customers.
A major part of the effort addresses consumers' fear of obsolescence, and puts the company in the upgrade business by offering to retrofit systems for a nominal fee.
Culver said focus groups over the past 12 months have shown that consumers want inexpensive systems that won't become obsolete and aren't too complex. He said the notion of the PC being a machine that does everything needs some refining. Most consumers, Acer found, don't want to use their system as a fax or answering machine, TV or FM radio.
To hit price points, Acer is equipping its systems with inexpensive Advanced Micro Devices microprocessors. Its entry-level system boasts an AMD K5 166 and sells without a monitor for a $799 expected street price.
Most of Acer's lineup focuses on the under $1,500-segment of the market, but a single step-up Intel piece, a Pentium 233MHz with MMX, will sell for an ESP of $1,899.
Along with focusing on what it believes are consumer-product needs, Acer is also working to improve its tech support. It is training staff to specialize on key areas of PC technology, and guiding tech-support calls to specific technicians; improving quality control at its factory to head off software/component conflicts that consumers encounter after loading Windows 95; and altering the design of its systems so components can be easily upgraded or swapped out by consumers, if need be.
Culver said Acer's upgrade program was designed to address consumers' remorse over quickly outdated systems. He said he doesn't expect the new program, which will allow consumers to upgrade a microprocessor for as little as $200, to interfere with retailers' upgrade business because retailers frequently upgrade at time of sale.
Acer systems now feature an easily removable side panel for processor and memory upgrades, and, where appropriate, they have CD-ROM drives on slide-out rails for easy upgrades to DVD. Acer has done away with green systems in favor of a standard off-white and a charcoal hue; it has also moved away from a pullout chassis design, which led to system alignment problems.
Analysts and sales associates appeared optimistic.
"I think it makes a lot of sense," said Stephen Baker, senior analyst for market research company PC Data, Reston, Va. "If you look at the way the market is splitting, the top-tier brands are recognized as cutting edge. But Acer doesn't have that cutting-edge name. Competing on price, availability, customer service is a good strategy."
Retail sales associates suggested current sales trends could present the Acer systems with opportunities and challenges.
"We actually have customers coming in asking for K6," said Brian Tootle, PC sales associate at the Glen Burnie, Md., Office Depot. What's selling, he said, are systems slightly better featured than the ultra low-end models, like Compaq's new micro-tower designs, at affordable prices.
Ken Ellward, a sales associate at an OfficeMax store in Ann Arbor, Mich., said, "We get a lot of requests for Pentium II and DVD, but response at the low end has been pretty good. It's about the only thing we're selling right now."
Sherwin Hershberger, PC sales associate at the Kansas City, Mo., Circuit City, said, "I'm selling more Pentium 166MHz systems than anything else."
And while he believes Pentium II will eventually sell well, "under-$1,000 [systems have] an equal amount of sales as far as the numbers go," Hershberger said.
Copyright (c) 1997 CMP Media Inc. |
