Mobile Insight

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Marginal Business

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Acer posted record revenues in the most recent quarter: $5.2 billion. They also overtook Dell and are now the second largest computer vendor. Look at their profit margin though, it’s a measly 2%. Acer might as well be selling groceries. Compare that with Apple’s most recent earnings report. $1.67 billion in profit and that works out to almost 17% net profit. No wonder Acer and Dell want to emulate Apple and move into the handset business. But as Colin Gibbs points out they have their task cut out for them. Neither has a strong reputation for creative hardware design or user-experience innovation which is where the battles are being waged on the handset front.

Commend both of them for trying and wish them the best. They should both be encouraged by the reasonable success that HTC (a relatively new entrant, at least as an OEM) appears to be enjoying. Ultimately it’s great for the consumer to have a highly competitive market. As a consumer I would love to see that 56% profit margin on those iPhones and other high end smartphones brought down a bit.

Written by Varma Chanderraju

November 6, 2009 at 1:07 pm

Posted in Uncategorized

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