ACER to Target Gaming Market Based on its Chromebook Results

ACER to Target Gaming Market Based on its Chromebook Results

Taiwanese company Acer recently unveiled a new suite of Chromebooks. The lightweight and inexpensive laptops running under Google software. This lot is said to be extremely durable while offering a longer battery life, the company said in its release. The Acer Chromebook Spin 511 is one of the new models. Its hinges allow it to open 360 degrees. The touch screen can be used in four different modes: tablet, laptop, screen and tent. The 11.6-inch Chromebooks are the backbone of the PC maker’s educational line since its launch in 2011. But announcements come at a time when many analysts predict that Chromebook brand-to-brand sales will decline in 2019 due to lack of traction among mainstream consumers and lack of Intel processors. Although the devices are still selling, a decline from the 15 million units planned would place Acer among the main co-developers of Google. Sales of personal computers, which are largely dependent on mass purchases from public schools, are expected to reach about 13 million units from different brands this year. Intel’s shortage of processors discovered last year would further slowdown low-end PC production, including Chromebooks, which are sometimes priced below $ 200.

Acer Depending On Gamers

Acer would rely more on revenue from gaming PCs, another growing sector, to absorb any slowdown in sales of Chromebook, analysts said. The Predator gaming line (Acer) will remain very important to generate higher margins as well as additional revenue through accessories. Acer, the world’s fifth largest computer manufacturer in October, was one of the first PC makers to produce and maintain Chromebooks. The Taiwanese firm, which had experienced financial difficulties from 2011 to 2013, joined Google in 2008 to develop Chromebooks and was rewarded in the last two years by a sharp increase in sales. Acer had the highest market share of any Chromebook provider in 2017. That same year, Chromebooks accounted for 60% of all computers shipped to US schools. The company’s current market capitalization is $ 56.6 billion. Should Chromebook sales slowdown, especially in the non-educational market where margins are higher, Acer will probably focus more on games or ultra-light products.

Its Gaming Products Performing Well

Acer’s two gaming computer ranges are a significant part of the company’s gross margin, said CEO Jason Chen in an interview in September. Gaming computers worldwide are expected to reach $ 32.9 billion in 2018, with players having spent 13% more than in 2017. If the shortage of Intel processors persists, Acer could use more AMD processors. Chromebook shipments are expected to decrease by 2% to 4% in 2019 due to uncertainties in component supply. The operating profit of Acer amounted to $ 1.17 billion third quarter in eight years, while net income was $ 912 million. It is predicted that Chromebook 2019 shipments from one brand to another will be 10% to 15% lower than 2018, and also that there would eventually be a late demand-supply in the Chromebooks category, except in the education sector, at least until the first half of the year. Sales of Apple and Microsoft, which have adopted an aggressive stance in recent years with their own equipment for schools, are also down, according to many industry experts following the sales of these two companies closely. Rivals include the Apple iPad for students. But many predict that the non-educational Chromebook market this year will surge to 37%, with a peak before the end-of-year holidays, with Google adding gaming features. Chromebook sales are likely to consolidate in the hands of three major suppliers this year as well, and Acer is one. The other two are Dell and Hewlett-Packard. Acer is likely to maintain relatively healthy growth, according to company representatives. This optimism is primarily attributed to the high hopes of the company’s top management, for their range of gaming products.

Acer Expecting Faster Growth in India

Taiwanese personal computer maker Acer expects a faster growth in the sales of gaming devices in India rather than its biggest market China this year. Acer has been working towards building a strong foothold in the Indian gaming industry from a long time. The company has achieved many milestones in the gaming industry by launching an array of innovative gaming products in India which was lapped up quickly with time. Recently at Acer Global Press Conference 2018 in New York, the company introduced its exceptional powerful gaming laptops, desktops and accessories like Acer Predator Helios 500 laptop, Predator Orion 5000 desktop, Cestus 510 gaming mouse and Predator gaming chair.

The company, which now runs an exclusive digital gaming tournament named after its gaming computer Predator in India, said it has seen three times revenue growth for the segment in the country. For the entire company up to November, their gaming revenue doubled; while the Asia Pacific grew 2.5 times and India grew three times in revenue. The motive is to use Predator as a new sub-brand.

While Acer has sold 48,000 gaming units so far in 2018 in the country, it has sold 2.8 lakh personal computers during this period, securing the fourth position in the country’s personal computer market with 12.1% share, according to research firm IDC. The company still expects the threefold revenue growth in India to continue. Gaming is still gaining prominence in India and that leaves a substantial room for bigger growth in that segment, Acer believes.

IDC’s November report said India’s traditional PC market shipments for the third quarter of 2018 stood at 2.71 million units, registering a 20.2% growth over the previous quarter and a 10.6% decline year on year. A rapid surge in the gaming communities in the country is also greatly boosting the demand for high-end and expensive gaming devices. IDC in its November report said an increase in discretionary spending aided by consumer-financing schemes provided a strong momentum to premium devices such as gaming notebooks.

Also, according to a joint report by KPMG and Google, the Indian online gaming market is expected to grow to $1 billion by 2021 from $290 million currently. It also said the number of gamers in India is expected to touch 310 million by 2021, up from 120 million in 2016 which is good news for Acer.