Acer in the pack

Acer has dealt out a new PC range to the MEA markets as the vendor gears up to accelerate even further into the SMB and corporate accounts. With a 100% indirect channel model, partners are being invited along for the ride.

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By  Stuart Wilson Published  March 29, 2004

Acer has dealt out a new PC range to the Middle East and Africa markets as the vendor pushes deeper into the SMB and corporate account sectors. With a 100% indirect channel model, partners are being invited along for the ride. Acer describes itself as a brand company rather than a manufacturer. It doesn’t actually make anything itself and instead uses a range of third party sources as suppliers. Acer does the final assembly and can concentrate fully on its sales and marketing effort. In the Middle East and Africa (MEA) sales are forecast to climb in excess of US$300m in 2004 from below US$200m in 2003 with profit margins running at 2.7% — a healthy number in the commoditised PC market. “Acer’s strategy is to avoid any direct sales,” says Emanuele Accolla, EMEA vice president and managing director MEA. “The channel is exactly what customers are looking for. Acer’s business model allows it to employ a relatively small number of people in relation to its sales.” The fast-growing vendor is convinced its business model provides an edge over competitors and it has just shuffled its management model to bring closer alignment between structures used throughout the Europe, Middle East and Africa (EMEA) region. This has meant giving senior managers responsibility for specific geographies within the MEA region, but coupling this with region-wide management of specific product lines. Krishna Murthy remains in place as general manager for the Middle East but also becomes business unit manager for displays and options. Philip Ashkar adds business unit manager for desktops and servers across MEA to his sales and marketing role in the Middle East. David Drummond combines the dual role of managing director Acer South Africa with business unit manager for notebooks and mobile products across MEA. Acer’s new models, the Veriton GT7600, GT5600 and GT3600, include a range of features to arouse corporate customers' interest. Accolla adds: “We can be competitive in corporate deployments. In this region we are improving Acer’s credibility and are currently working on some significant tenders with partners. Acer has people in the region talking to large accounts and working with partners in a joint engagement model.” With some vendors prepared to sell below cost into large accounts just to get a foot in the door and hopefully make up any shortfall through related software and services sales, Acer’s entering a tough market sector. Acer EMEA has managed to reduce its own inventory levels from 30 days to just 15 during the last three years. “We have shortened our time-to-market by 50%,” adds Accolla. “With inventory depreciating at 2% a month, this can improve bottom line margins by 1%.” There is still room for margin improvement in the Middle East as channel structures mature and pan-regional distributors emerge. Acer estimates that the end-to-end cost of selling through the channel is 8% of the total product cost in Europe. In MEA that figure can rise as high as 12%.

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