Acer Buys Retailers To Shift Excess Stock As Lenovo Buys Medion

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Acer has been accused of dumping notebooks in an effort to clear excess inventory, while Lenovo has moved to take over Medion, the German PC brand that is sold in Aldi stores in Australia.Acer who saw sales slump 20 percent recently said that it will provide retail and solution provider channels with $155 million in sales incentives to clear excess stock.

Industry observers claim that Acer is trying to clear 3 Million notebooks and the move could create “turmoil” in the market.

Acer has not said whether Australian retailers are being offered incentives to shift the stock.  

A senior executive of a major notebook company said: “This will really stuff up the channel. It’s tough out there at the moment and if Acer tries to buy their way out of trouble it will have an impact on competitors whose products are sold in the same stores as Acer products”.

Among those set to be impacted are ASUS, Toshiba, Dell and HP.

Asustek (ASUS) said that they have already moved to respond to Acer’s actions.

Recently ASUS declared losses of US$150 million. DigiTimes said that Acer’s second-quarter results are in grave danger of turning to losses.

In other moves Chinese PC company Lenovo has moved to acquire Germany-based consumer electronics vendor, Medion.

Lenovo Group said that they have agreed to buy Germany’s Medion AG in a deal valuing the electronics retailer at up to $900 million.  Lenovo will pay up to $666 million for the deal. The acquisition, Lenovo’s biggest since its purchase of IBM’s PC business six years ago, comes four months after Lenovo signed a joint venture deal with NEC Corp to sell laptops in Japan.

The move will help Lenovo expand their consumer presence in Europe by TAKING 14 percent share of Germany’s PC market.

Commenting on Acer and Lenovo’s actions, AsusTek CFO, David Chang, said that he believes Acer is clearing old stock with the incentive program.

 

He said it will not affect AsusTek unless the clearance includes the latest Sandy Bridge-based products.

To counter the moves, Chang said that AsusTek has already planned several measures to minimize the impact. He said that Lenovo’s acquisition of Medion will help Lenovo raise its global PC market share by 0.3 percent.

Other PC sources claim that Acer’s strategy of cutting prices to compete for market share will affect the market in the short term.

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