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Acer shedding eMachines, preparing post-PC Gateway and Packard Bell

Acer adapts to post-PC era, will add non-PC products to Gateway and Packard Bell lineups

By Agam Shah
January 24, 2013 04:50 PM ET

IDG News Service - Acer is trying to adapt to the slowdown in the PC market by shutting down its eMachines unit and refocusing Gateway and Packard Bell to offer new products that are "beyond the PC."

Earlier this week, Acer took charges to the tune of $120.1 million related to the lost value of assets including the Gateway, eMachines and Packard Bell product brands. The company announced it would discontinue the eMachines brand, which is U.S.-focused, but will continue to offer Gateway and Packard Bell products.

"As computing devices are used in new ways, both on the go and throughout the home, Gateway and Packard Bell will adapt their product portfolios to meet these needs," said Lisa Emard, an Acer spokeswoman, in an email on Thursday.

Emard did not comment on what types of products would be offered under the Gateway and Packard Bell brands. But the new computing environment involves new and different usage models and form factors, and Acer will continue to invest in Gateway and Packard Bell to sell "a variety of devices that would have been thought of as beyond the PC in the past," Emard said.

The products could include tablets, which are increasingly being used as an alternative computing device to PCs. Other devices like smart TVs, media-streaming boxes and smartphones are also being used to browse the Web, write email and stream movies from sites like Netflix.

Acer in 2007 paid $710 million for Gateway, and in the process acquired Packard Bell's assets. Gateway acquired eMachines in 2004, and Packard Bell in 2007. Gateway's laptops, desktops and displays are now being sold in the Americas and Asia-Pacific, while Packard Bell products are sold in Europe, the Middle East and Africa.

Acer already offers a range of PCs, tablets, smartphones, servers, networking and storage products worldwide. But the company's main business still revolves around PCs, which is a slumping market with overall worldwide unit shipments dropping by 6.4 percent in fourth quarter compared to the same quarter in 2011, according to IDC. Acer was the fourth largest PC vendor behind Hewlett-Packard, Lenovo and Dell, with shipments of around 7 million units, a drop of 28.2 percent compared year over year.

No eMachine-branded products will be sold in the future, but its website will remain live for customer support, Emard said. Gateway stopped selling PCs through its website in 2008, and is now selling fixed configuration products through third-party online stores and retailers.

Acer became a bloated company with all those acquisitions, and the latest moves are an effort to shed excess fat and be more agile, said David Daoud, research director at IDC.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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