How Acer Became The Top Netbook Maker

December 27, 2008   -   Tom Greer
Filed Under Acer Aspire One, Asus Eee PC, Dell Inspiron Mini 9, HP Mini-Note, Lenovo IdeaPad S10, MSI Wind Netbook, ULPC Market |

Acer Aspire One

Back around the middle of this past year, the netbook marketplace really began to buzz as the launch dates of the second-generation netbooks were nearing.  MSI was garnering a major chunk of the mind share, with the Wind Netbook receiving rave reviews.  Meanwhile, Asus was busy announcing new Eee PC models at a dizzying pace.  Acer was preparing to introduce the Aspire One; however, while the reviews were favorable, it was getting a lot less buzz.

Fast forward to now (year-end) where the Acer Aspire One is king of the netbooks.  How did they do it?

The simple answer has two parts:

1. Acer did a great job designing  a product that met customer’s wants and needs.
2. They made a few “right” moves in marketing the Aspire One
3. They didn’t make any mistakes and watched while their competitors floundered

The Right Design

Aspire One's Display Has Wide Viewing Angle

Acer simply made the right choices when designed the product.  Here are my perceptions of what they did right:

• 9-inch Display:

  MSI got a lot of favorable press for the 10-inch display on the Wind U100 netbook - as did Asus for the Eee PC 1000-series.  But the resolution on the 9 and 10-inch screens are the same (1024x600), so the only advantage is bigger.  But that also means more expensive.  As a result of lower manufacturing cost, Acer has been able to price their product significantly lower than the comparable 10-inch models.

• 10-Inch Keyboard

  The keyboard (and case) of the Aspire One is about the same size as the MSI Wind and the Eee PC 1000-series netbooks.  It is larger and much more usable than the Eee PC 900-series (which have similar 9-inch screens).  The keyboard provides great tactile feedback.  Most importantly (at least to me), the shift keys are full size and in the right place - which makes touch typing on the Aspire One a breeze.

• 3-Cell Battery (at launch)

  Acer introduced the Aspire One with a 3-cell battery.  When a global battery shortage severely restricted the availability of the 6-cell batteries that Asus and MSI were using, the 3-cell design allowed Acer to fill the pipeline when their competitors (particularly MSI) struggled.

• Both Linux and Windows Versions at Launch

  At launch time, Acer offered a choice of  either Linux or Microsoft Windows.  In addition, they packaged the Linux version with solid-state drive storage and the Windows version with a traditional hard drive.  These combinations proved to be what customers wanted.  MSI promised a Linux-version of the Wind, but delayed its arrival repeatedly.  I don’t believe I have ever seen a Linux-based Wind for sale in the USA.

The Right Marketing Moves

Acer has also made several great marketing moves with the Aspire One.  Here are my views:

• Product Launched At The Right Time

  Acer introduced the Aspire One in mid-July, and was one the first of the second-generation netbooks.  Asus and MSI were launching their new Intel Atom-base netbooks around the same time.  Dell, Lenovo and HP were very late to offer Atom-based netbooks.

• Product Available At Launch

  While Acer did not generate a huge buzz in advance of the Aspire One.  They delivered product when they said they would.  While MSI was missing promised launch dates and then down-grading their product, Acer was busy filling orders.  Personally, I was waiting for an MSI Wind to replace my Eee PC 4G Surf.  I finally gave up waiting and settled for an Aspire One.  I have been delighted ever since.

• A Simple Consistent Product Image

  Acer offers the Aspire One in a number of different configurations, however, Acer’s marketing has created a single image of the Aspire One.  When someone talks about the Aspire One, you know exactly which netbook they are speaking.  This proved to be a competitive advantage against the Asus Eee PC.

• Agressive Pricing

  Acer priced the Aspire One very competitively to start, introducing the Linux version in mid-July at $379 in the USA.  Then they got aggressive.  At the end of August, only 5-6 weeks after the launch, Acer cut prices on the Aspire One dramatically.   For example, the list price on the Linux version was cut from $379 to $329.  This caught everyone else flat-footed.   It also killed the 7-inch netbook niche.  Spending $299 for a 7-inch model no longer made sense.

Flawless Execution While Competitors Floundered

Acer has executed all of the above flawlessly.  There have been no serious mistakes to note.  That is not true for their competitors.

• Asus Misses With 901-Series

  

  Aspire One's Larger Case Compared to Eee PC 901

  Asus introduced the Eee PC 901-series as their first Intel Atom-based netbook.  Like the Aspire One, the Eee PC 901-series features a 9-inch screen.  However, the case is significantly smaller than the Aspire One.  As a result, the keyboard is tiny and most adults have difficulty using it.  Most buyers passed on the 901-series, opting for netbooks with bigger keyboards.

• MSI Can’t Deliver

  MSI planned to launch the Wind with a 6-cell battery; but could not procure enough.  After delaying the Wind’s introduction, the product was temporarily packaged with a 3-cell battery. This last-minute change  created chaos, forcing customers to wait months for a 6-cell version or accept a lesser-product.

• MSI Price-Gouges Customers

  Being unable to produce enough Wind Netbooks to meet demand, MSI took advantage of their lack of supply by raising the price of the Wind U100.  Buy.com had accepted pre-orders at the original price - the price increase forced them to cancel all of these pre-orders.  As you would expect, this did not please customers.

• Asus Introduces A Million Products Named Eee PC

  OK.  It just seemed like a million.  During the summer of 2008, Asus announced a new Eee PC models at a dizzying pace, confounding even the experts.  For example, here is a partial list of Eee PC models: Eee PC 2G Surf, 4G Surf, 4G, 8G, 701SD, 900, 901, 904HA, 1000, 1000H, 1000HA, 1002HA, S101, Eee Top and the Eee PC Box.  Customers were (and still are) totally confused by the plethora of different products called Eee PC.

• Late to Market with  Me-Too Products

  Dell, Lenovo, HP and Samsung all introduce Intel Atom-based netbooks late in 2008, missing the primary window of opportunity.  HP gained some early traction with its Mini-Note product line, but these became most well-known for their dog-slow VIA C7 processors.  All of these products have features very similar to the Aspire One, MSI Wind and Eee PC 1000-series.  All of these late netbooks are solid products, but they have failed to differentiate themselves.

• Toshiba and Fujitsu Miss the Train

  Both Toshiba and Fujitsu dismissed netbooks as a fad and decided not to market any netbooks  (at least in the USA).  I expect that both ultimately will  join the party (both now sell netbooks outside the USA).   But these will also be me-too products that, like Dell, Lenovo and HP, will be primarily be  sold to customers who are loyal to their brand.

• AMD Implies Netbook Buyers Are Stupid.

  As long as we are counting missed opportunities, we might as well include AMD’s netbook debacle.  It was bad enough that the success of the Intel Atom processor took AMD by complete surprise.  But instead of recognizing their error and taking action to address their shortcoming, AMD’s executives repeated bashed and ridiculed netbooks.   I’ve long been a loyal AMD proponent, but their comments really upset me.  It seemed that they were calling me stupid.  I won’t forget that any time soon.