Acer on Windows 8
The news of the day for me was this article.
I read it and found myself promptly disagreeing with it and finding this article in the link immediately below it in my Google search.
I don't think the second article is in depth enough to provide any insight. But I didn't find it amusing that after reading the first article I wasn't the only one who felt Acer's stance might be a tad flawed.
Basically, is it fair for Acer to say that Windows 8 still is not successful? Based on the numbers I'm seeing, they probably do have a leg to stand on there. Where the argument falls apart however is in comparing it to Google Chromebooks.
The first point in there that is oh so easy to rip apart is that Chromebooks are only as much as 10% of their PC sales. Which means 90% is still Windows. That is quite the disparity.
Then, in addition to that they mentioned that they had to advertise (at their cost) to get the percentages up that high. So whatever they saved in licensing costs, they likely lost that and more in advertising. In fact, I would be unsurprised to find if as a result of the marketing they actually lost money on Chromebooks.
I'll get to this point later... but hearing that big name companies are now thinking of advertising Chromebooks is actually even scarier for the industry.
Moving on, they don't mention specific, but they talk about growth rates. This is an absurd metric. Growth rate is only relevant for products which are neither new, nor at saturation points. Growth rates year-over-year when your market saturation was at or zero percent will seem astronomical if there is ANY growth, even that minimal growth is anomalous. And if you are at or near saturation then growth can really only increase by the smallest margins if at all, and is actually more likely to fall.
The last point I would make regarding the article, is that Acer knows that the market where they are seeing success is in education. This market will be quickly saturated. Also, they are buying Chromebooks because they CAN'T AFFORD more expensive solutions. This means that once the market is saturated many of these current buyers will not be repeat buyers. All this shows to me is that the low cost education market isn't completely saturated yet. But I doubt that market is very much larger for Acer than what they accomplished this past year. I would be interested to know the consumer numbers behind those sales which are likely beyond negligible, and it is that market you want sold on your products as they will generate far higher volumes and repeat sales.
Now circling back to a move towards mainstream Chromebooks. If they actually start doing this it is a bad thing. The one thing really pressing OEM's at the moment is that cheap tablets and netbooks have driven the average sales price (ASP) of a PC/Laptop through the floor. Selling MORE even cheaper chromebooks might boost sales until other vendors jump in and prices get competitive. If they succeed in making Chromebooks mainstream, ASP for laptops and computers is going to plunge lower and companies like Acer are going to be "enjoying" smaller margins on an ever shrinking ASP.
Reality... OEM's need Microsoft. Or rather they need an OS that inflates hardware prices. They need to keep those ASP's as high as they are and hope one day to move them even higher. You won't achieve that by selling a laptop with a low sticker price and low hardware requirements. They can fill out the empty period by finding new markets, or they can even try lower priced solutions. In the end though, lower priced solutions today will eat their margins tomorrow.
So, while Windows 8 may indeed not be doing incredible today for Acer. Chromebooks are currently not doing better in a provable sense as a long term investment. I think if Acer had left it at Windows 8 not doing well you'd have to take comment as true at least at face value. By trying to stir the pot by comparing it to Chrome OS I think Acer ruins their credibility.
I read it and found myself promptly disagreeing with it and finding this article in the link immediately below it in my Google search.
I don't think the second article is in depth enough to provide any insight. But I didn't find it amusing that after reading the first article I wasn't the only one who felt Acer's stance might be a tad flawed.
Basically, is it fair for Acer to say that Windows 8 still is not successful? Based on the numbers I'm seeing, they probably do have a leg to stand on there. Where the argument falls apart however is in comparing it to Google Chromebooks.
The first point in there that is oh so easy to rip apart is that Chromebooks are only as much as 10% of their PC sales. Which means 90% is still Windows. That is quite the disparity.
Then, in addition to that they mentioned that they had to advertise (at their cost) to get the percentages up that high. So whatever they saved in licensing costs, they likely lost that and more in advertising. In fact, I would be unsurprised to find if as a result of the marketing they actually lost money on Chromebooks.
I'll get to this point later... but hearing that big name companies are now thinking of advertising Chromebooks is actually even scarier for the industry.
Moving on, they don't mention specific, but they talk about growth rates. This is an absurd metric. Growth rate is only relevant for products which are neither new, nor at saturation points. Growth rates year-over-year when your market saturation was at or zero percent will seem astronomical if there is ANY growth, even that minimal growth is anomalous. And if you are at or near saturation then growth can really only increase by the smallest margins if at all, and is actually more likely to fall.
The last point I would make regarding the article, is that Acer knows that the market where they are seeing success is in education. This market will be quickly saturated. Also, they are buying Chromebooks because they CAN'T AFFORD more expensive solutions. This means that once the market is saturated many of these current buyers will not be repeat buyers. All this shows to me is that the low cost education market isn't completely saturated yet. But I doubt that market is very much larger for Acer than what they accomplished this past year. I would be interested to know the consumer numbers behind those sales which are likely beyond negligible, and it is that market you want sold on your products as they will generate far higher volumes and repeat sales.
Now circling back to a move towards mainstream Chromebooks. If they actually start doing this it is a bad thing. The one thing really pressing OEM's at the moment is that cheap tablets and netbooks have driven the average sales price (ASP) of a PC/Laptop through the floor. Selling MORE even cheaper chromebooks might boost sales until other vendors jump in and prices get competitive. If they succeed in making Chromebooks mainstream, ASP for laptops and computers is going to plunge lower and companies like Acer are going to be "enjoying" smaller margins on an ever shrinking ASP.
Reality... OEM's need Microsoft. Or rather they need an OS that inflates hardware prices. They need to keep those ASP's as high as they are and hope one day to move them even higher. You won't achieve that by selling a laptop with a low sticker price and low hardware requirements. They can fill out the empty period by finding new markets, or they can even try lower priced solutions. In the end though, lower priced solutions today will eat their margins tomorrow.
So, while Windows 8 may indeed not be doing incredible today for Acer. Chromebooks are currently not doing better in a provable sense as a long term investment. I think if Acer had left it at Windows 8 not doing well you'd have to take comment as true at least at face value. By trying to stir the pot by comparing it to Chrome OS I think Acer ruins their credibility.
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