Acer to acquire Gateway for $710 million

“Taiwan’s Acer will buy Gateway for $710 million, creating the world’s No. 3 PC maker and doubling its U.S. presence while dealing a blow to arch-foe Lenovo’ efforts to grow in Europe,” Sheena Lee and Sophie Taylor report for Reuters.

“Acer said the merger would create a company with more than $15 billion in sales and 20 million PCs shipped per year, adding it would keep the Gateway brand in the United States,” Lee and Taylor report. “On a worldwide basis, the tie-up would help Acer — Taiwan’s most recognized global brand — displace Lenovo.”

“The deal would help Acer immediately double its U.S. market share, combining its own 5.2 percent of the market with Gateway’s 5.6 percent, according to second-quarter market data from IDC,” Lee and Taylor report.

“The deal is expected to be completed by December and the merged company would still be a distant third in the United States, behind No. 2 Hewlett-Packard at 23.6 percent and market leader Dell at 28.4 percent, according to IDC,” Lee and Taylor report. “A merged Acer and Gateway would have sold about 18.6 million PCs worldwide last year, or about 8 percent of global sales, compared to Dell’s 39.1 million units, Hewlett-Packard’s 38.8 million and Lenovo’s 16.6 million, according to IDC.”

Full article here.

MacDailyNews Note: IDC placed Apple in a virtual tie with Gateway for 3rd in the U.S. in Q2 07. According to IDC, Apple shipped 960,000 Macs in the U.S. to Gateway’s 965,000 units for 5.6% market share for each. Apple’s Mac business is growing at roughly three times the PC industry average. For the quarter ended June 30, 2007, Apple shipped 1.764 million Macs worldwide, representing 33 percent growth over the year-ago quarter and exceeding the previous company record for quarterly Mac shipments by over 150,000 units.

25 Comments

  1. Awesome news! Competition is good for Lenovo. My favorite is Dell but it’s always good to see strong competitors in the marketplace driving the fantastic innovation which surrounds Microsoft Windows Vista.

    After an announcement like this, I don’t know why Apple even tries. Dell should buy Apple for FileMaker Pro and cancel development and production of everything else. It’s all Apple has.

    Your potential. Our passion.™

  2. Looks like consolidation is happening in the PC market. The big boys trying to find new ways to sell cheap boxes.

    Interesting that Apple sold as many PCs as Gateway but managed to make money out of the business.

  3. Gateway has about the same share of the computer market as Apple. Gateway is worth 710 million. Apple’s market cap is 116 billion, or over 160x the size of Gateway.

    Sure, Apple is into a lot more things, but it goes to show you what a race to the bottom gets you.

    “Acer said it expected to achieve at least $150 million in pre-tax synergies following the merger…”

    In other words, the deal is really about trying to find cost savings. Expect a lot more mergers in the near future, folks, as hardware makers, desperate to find “synergies” as their margins tank even further, buy each other up and position it to investors as being about “growth.”

    “”The cure for Apple is not cost-cutting. The cure for Apple is to innovate its way out of its current predicament.”–Steve Jobs, 1997

  4. Lets run down the “it’s hot, now they are not” in the PC buisness while Apple still is going from the very begining?

    IBM
    Compaq
    Gateway

    I know I’m missing quite a few in between.

    Of course Dell is begining it’s slow circle of the toilet bowl as we speak.

    Now if Apple would only put out a GPS like this

    http://technabob.com/blog/2007/08/25/provia-a1-gps-navigator-way-too-sexy-for-itself/

    Hurry Apple.. you could own the USA/Euro GPS market with a device like this.

  5. Cheap computers are cheap computers. The components are one generation or more old and/or at the bottom of the good-better-best ladder. Their assembly is bare bones cheap and prone to multiple errors. They use low end OS software like Windows or DIY Linux.

    Who needs the aggravation?

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