Today’s launch of the Acer 10-inch Aspire One with its very competitive $349 price tells it all: the Taiwan based company is coming at the competing army of netbooks with guns blazing. Sure, they took a large piece of the netbook market share in the fourth quarter of 2008, but Acer plans to maintain its lead with the number of different tactics it has up its sleeve. We spoke with Acer’s Vice President of Product Marketing Sumit Agnihotry about the growth of the Aspire One line and the company’s mobile computing plan for the next few months. He shared that:
You will have to read the full Q+A below to get all the juicy details. Acer became the leading manufacturer of netbooks in the fourth quarter of 2008. Have you been surprised at how the market has taken off? Our expectations were that netbooks would be 4 or 5 percent of the notebook computing business, but if you look at the NPD data it is now at 12 percent and it’s trending to towards 15 to the high teens in terms of the share. Netbooks are going to only expand now, especially as they become always connected, and closer to a smart phone device with embedded 3G. Do you attribute the surge in popularity of netbooks to price or size? Ultraportables have been around forever and there was a huge premium for those. We always believed that for consumers notebooks needed to be thinner or lighter, but we had to charge a premium. The netbook changed the game. We were able to offer the portability and just the right amount of performance with the Atom processor. I think it’s a combination of portability and if there is no premium then they are embracing the model of using this as a second or third device. The 10 inch version is in a way the second generation of the Aspire One, what was important to improve? Beyond the screen size, when we look back to the launch of the Aspire One, one of the main pain points was the battery life and the inablity to be always connected to the Web. The battery life solution is one step closer to all day computing. We are trying to get to a point, like with a smart phone, where you don’t have to worry about the battery dying. That is what we want to get to on netbooks. We also have corrected the placement of the mouse buttons; they are now under the trackpad. We will have both platforms continuing and we will refresh the technology every few months. We think there is room for a better, best environment. The price on the 8.9 will go down to $299. You mentioned always connected and Acer currently has a subsidized option with AT&T. Can you speak to the popularity of that option? In December, when we started the pilot program with RadioShack and AT&T, we wanted to get a jump-start because if you look at the historical data on embedded 3G solutions it was small. We wanted to take an aggressive risk and see if there was demand. And the answer is yes. We learned that it’s extremely important to talk about always connected, but secondly we learned that some people want different connectivity options. Not all consumers are looking for unlimited access on 3G. Some want to use their home wireless and then when they are at Starbucks they want to use 3G but for only a few hours. Kind of like your handset device from a data perspective. Is there a discussion to work on this with the wireless community on a metered pricing plans? This is what the teleco industry, the retailers and the OEMs are learning and we will respond to the customer’s needs by coming out with plans that are not just unlimited hours. In a netbook environment – whether its Wi-Fi, WiMax or 3G – there is room for all connected environments to co-exist. What are a couple of scenarios: day passes, paying by the megabyte? Our position with the telcos and the retailers is to come up with a plan that is easy to understand. Consumers can better understand the amount of hours they can be online versus the amount of megabytes. We could have a time meter in the connection manager that alerts you to how many hours you have left. We are moving towards an X amount of hours per month. We also see an opportunity for let’s say you are at an airport and you want to buy a day pass. The industry is extremely excited and we think this could go beyond netbooks. We think there are going to be a lot more embedded devices out of the factory. Is an offering like Qualcom’s Gobi, which allows for switching between carriers, an attractive option for this? There is that business model, but today at a preliminary stage we are partnering with a telco partner. The model where consumers can pick different carriers may appear, but today we are looking at how can we partner. The embedded solution and getting the message across is new. Seventy percent of consumers don’t know the difference between a netbook and a notebook so we are working on the message of you can buy this device and have an hourly plan, or whatnot. What is Acer’s take on using the Intel Atom platform in larger sized netbooks? You will see Acer really expanding in the thin and light category and providing more battery life with affordability. You will see us pairing a mainstream, ultra low voltage processor with larger displays like 13, 14, and 15.6 and also keeping them at affordable price points. We are going to focus on the customer pain points which are thinner, lighter systems, long battery life, and always connected. Partially, we will be supported by netbooks, but a big portion will come from the ultra low voltage roadmap that you will see in the second half . Others clearly want a piece of the netbook pie including AMD with its Neo platform and Nvidia with its Ion, what is your take on these competing solutions and will Acer be adopting them? We always work with all partners and look at their solutions. Our partnership with Intel has been from the beginning and we initiated this segment together so we will continue to be a strategic partner with them on the netbook. On the Nvidia solution, the benefits are great including the ability to play back high def content. You will see us looking at this technology much closer in our second half products. The first Aspire One offered a Linux Linpus operating system, what is your take on Linux at this point for Acer’s netbook line? It is interesting because when we first launched the netbook it was with the Linux environment and there are, of course, a lot of benefits to it including fast boot up and a simpler interface. But the critical mass seems to be set on XP. The biggest challenge is getting the message out on Linux; it is just not as familiar to mainstream consumers. It will still continue to be only 5 percent of the total mix. One of our pain points with Linux we have found out about is that customers don’t feel that they have the security that they have in XP. It is really just getting the message out there. Another way to adopt Linux seems to be with an instant on environment. What do you think of solutions like Splashtop and Phoenix Hyperspace and do you think Acer will warm up to those? We think the next step with instant on is making sure consumers can boot up into the environment and get online right away to check e-mail and browse the Web. These feature sets today are aimed at the tech savvy professionals but we think this trend will resonate with the critical mass. With Acer set to launch a smartphone this week at Mobile World Congress, what is it that Acer plans to bring to the crowded handheld market? One of the things we have been able to do is bring technology to mainstream and this has been our forte. We think with smart handheld technology it fits into this overall business model as well. We think this is a big category and all three devices — smartphone, netbook and notebook — fit together for the end consumer. There is going to be some seamless transition between going from your handheld device to your netbook to your notebook. I think this will be the next trend into 2010. What about mobile Internet devices or MIDs? The MID is something we continue to look at. Historically you have seen the results that consumer acceptance has been mediocre. Our approach is going to be different when we do look at this category. From a usage model, we have placed it under the smart handheld device.