Acer Chief Takes Aim at Microsoft Surface

Acer, the world’s fourth largest computer manufacturer by shipments, has attacked Microsoft’s planned move into tablets, highlighting the growing rift between the software company and its former allies among PC makers.

Source: Acer

JT Wang, chairman and chief executive of Acer, said Microsoft’s plans to launch its own“Surface” tabletin October – in direct competition with his company’s Iconia or HP’s TouchPad tablets would be “negative for the worldwide ecosystem” in computing.

He is the first head of a big PC maker to criticize Microsoft’s move publicly.

“We have said [to Microsoft] think it over,” he told the Financial Times. “Think twice. It will create a huge negative impact for the ecosystem and other brands may take a negative reaction. It is not something you are good at so please think twice.”

The criticism is particularly striking because over the past two decades, Microsoft and PC makers have enjoyed a symbiotic relationship.

Microsoft’s Windows operating system, together with Intel’s processors, provided a standardized, open platform that allowed PC makers to focus on improving hardware. In turn, competition between companies like Acer , Dell and Lenovo drove prices down for consumers and helped spread the use of Microsoft software.

This model, however, is being disrupted by the rise of smartphones and tablets, spearheaded by Apple’s iPhones and iPads. This prompted Microsoft, which last month announced its first loss as a public company, to market its own Surface tablet as it plays catch up.

The US company acknowledged the tensions this would create in a recent regulatory filing, where it noted: “Our Surface devices will compete with products made by our OEM [original equipment manufacturer] partners, which may affect their commitment to our platform.”

Campbell Kan, Acer’s president for personal computer global operations, said the Taiwanese company was debating internally how to respond to the Surface and any further challenges that could arise if Microsoft expands further into hardware.

“If Microsoft … is going to do hardware business, what should we do? Should we still rely on Microsoft, or should we find other alternatives?,” Mr Kan said.

This calculus is complicated by the fact that, for now, Microsoft’s upcoming Windows 8 operating system remains PC makers’ best hope for reviving flagging interest and sales in traditional laptops and desktops.

This year, Acer has guided towards revenue growth of zero to 5 per cent, but Mr Wang said he expects Acer to return to double-digit growth in 2013, powered by a strong array of tablets and ultrabooks, its slender range of laptops.

Mr Wang was as exuberant about Microsoft’s work on touchscreens in Windows 8, as he was critical about its move into hardware. “The keyboard is still a necessity but touch is becoming a fashion and necessary feature,” he says. “Windows combines the touch and the keyboard. If you don’t have touch you are antique.”