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As PC Sales Wallow Acer Invests In Selling Direct

By David Richards | Sunday | 02/12/2012

Australian PC companies are facing a "horror" run into the peak Xmas buying period as consumers shun buying Windows 8 devices and notebooks in favour of tablets and smartphones.

As retailers realign their brands, some brands like Acer have found themselves dropped by stores such as Harvey Norman because they lack brand appeal.

New research shows that sales of Windows-powered personal computers fell 21 per cent last month despite a major campaign by Microsoft and Intel to push Ultrabooks and the new Windows OS.

A report by the NPD Group, which tracks computer sales by retailers, has painted a damming picture of despair.

As a result companies like Sony and Acer are now moving to expand their online shops in an effort cut out the margins and marketing rebates they have to pay retailers in an effort to survive. 

Under the direction of Acer Marketing Director David Sunton, Acer Australia has invested heavily in setting up a direct sell web site.

A former notebook executive at the Taiwanese Company who recently left to join a printer company confirmed to ChannelNews Acer notebook sales have slumped by more than 30% this year, and that under Sunton and Acer Australia's Managing Director, Charles Chung, the Company has initiated a major program aimed at selling direct via an expanded online store.

One senior executive who quit the Company to work for a competitor said "The only problem is that Acer does not like spending money on their brand. They live off handouts from partners like Intel, they will spend on retailer co-op programs but when it comes to brand market they are being outspent by a lot of their competitors".

"For the Company to go online like they are planning, they are going to have to invest in direct response marketing. They have invested in additional personnel recently for their online operation, but when it comes to constant marketing to drive sales to their own store they will struggle. Retailer partners will not like it and they run the risk that they could be dumped by retailers".

"Acer believes that the risk is worth it because of the marketing rebates and margins that Australian retailers are demanding" the executive said.

Since the launch of Windows 8 on October 26, Windows laptop sales are down 24 per cent, while desktop sales are down 9 per cent compared with the same period last year, making an overall 21 per cent dip, NPD said.

In the past, a Microsoft Windows release has boosted PC sales because many consumers hold off purchasing a new computer until they can get a new Windows OS.
But not this time, because of the complexity of using Windows 8 consumers are ditching their Windows devices for offerings from Apple and Google claim analysts.

If the NPD's sales trends continue, it will be a huge disappointment for Microsoft and PC makers such as Toshiba, Dell, HP and Lenovo claim NPD executives.

"After just four weeks on the market, it's still early to place blame on Windows 8 for the ongoing weakness in the PC market," said Stephen Baker, vice president of industry analysis at NPD. "We still have the whole holiday selling season ahead of us, but clearly Windows 8 did not prove to be the impetus for a sales turnaround some had hoped for."

Since Microsoft introduced Windows 8, it has accounted for only 58 per cent of Windows computing device unit sales, compared to the 83 per cent Windows 7 accounted for at the same point after its launch in 2009, NPD said.

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