ACER ACQUIRES GATEWAY

Acer, the third largest PC manufacturer globally, announced that it is acquiring Gateway and the eMachines brand purchased by Gateway a few years ago.

I’m nostalgic about Gateway after all the years of buying computers in the famous cow-spotted boxes, but Gateway’s slide into irrelevance began long ago and the brand name does not mean anything now. It was already failing in 2001 and had closed all of its stores by April 2004. It was at a low ebb in May 2004: it had lost money in 13 of the previous 14 quarters, it had closed all its retail stores, it had cut its workforce from 24,600 to 7400 employees, and it had stopped manufacturing its own computer products. I don’t have details about the last three years but I don’t think things changed very much.

Interestingly, at that low ebb three years ago, Gateway still had a larger market share than Apple in the US. It wasn’t until last month that Apple tied Gateway for PC shipments in the US, in third place behind HP and Dell.

Why is Acer buying Gateway, then? Acer has been growing fast in the last three years but it’s had trouble cracking the US market; perhaps it thinks Gateway still has some brand loyalty. Or perhaps there’s another angle: a separate news item today reports that Gateway intends to exercise a right of first refusal to buy Packard Bell, another long-time manufacturer of stinky computers, almost deceased in the US but apparently still selling some computers in England and parts of Europe.

That would put Acer, Gateway, eMachines, and Packard Bell under one roof – a gathering of companies with unbroken track records of making crappy computers going back many years now. It’s rather frightening, really.