Gateway brand to expand after Acer purchase

Gateway's brand name will not only live on after Acer buys the company, it will expand, Acer said.

People fearing they might miss Gateway's signature black-and-white dairy cow PC boxes after the company is acquired by Acer have little reason to worry: Acer not only plans to keep the Gateway brand just the way it is, the Taiwanese company hopes to expand it.

"A strong US brand such as Gateway's can be expanded overseas into other markets," Acer president, Gianfranco Lanci, said.

Acer's determination to grow the brand should be some relief to American users. Gateway is the fourth biggest PC brand in the US, and popular among consumers. But, until now, Acer has sold all of its products under its own name. Its strategy going forward is to start using multiple brands in all areas of the world, including the Gateway brand, as well as eMachines and possibly Packard Bell. Gateway plans to buy Packard Bell, which would ultimately end up as another Acer brand once the Acer-Gateway deal is finalised.

Going forward, Acer plans to combine the talents of each company in order to expand product offerings for users. For example, Gateway was strong in desktop monitors, where Acer was weak, so Acer would use some Gateway technology to improve its offerings, Lanci said.

The two companies will see where they can share designs and technology to improve their entire desktop and laptop PC line-ups, and expand this product cooperation to Packard Bell if a deal for the company is made.

The deal could also mean more PC bargains for users. Becoming larger means Acer can gain better volume discounts when negotiating with parts suppliers. In addition, competition with HP and Dell should remain fierce, and the companies all work hard to keep prices low.

Acer agreed to buy Gateway in an all-cash deal valued at $US710 million. The two companies combined will become the world's third largest PC vendor by shipments, at around 20 million desktops and laptops a year, and will transform Acer into a multi-brand company.

The Acer-Gateway deal still faces regulatory and shareholder scrutiny before being finalised. The boards of directors of both companies have already signed off on the agreement.

Acer expects to gain $US150 million worth of efficiencies via the Gateway deal, in expanding product lines, cross-selling products, cost cutting and in other ways.

The Taiwanese company said Gateway employees would be critical to its success in expanding the brand, but did not say whether it would cut staff.

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Dan Nystedt

IDG News Service
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