Acer sets doubled budget to support Internet push

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Laboring in the shadow of tech heavyweights such as Dell Computer Corp., IBM Corp. and Hewlett-Packard Co., Acer America hopes to double its marketing budget this year as it develops next-generation consumer Internet appliances and enters other new businesses.

Currently, Acer America Corp. spends more than $25 million on marketing the products and services in its computer, peripherals, semiconductor and digital services businesses. Executives say they plan to fund the increase with a cash infusion from Acer Group's corporate headquarters in Taipei, Taiwan.

Even so, the budget is paltry in comparison to efforts such as HP's recently launched $200 million global initiative and Compaq Computer Corp.'s $60 million effort billing itself as a non-stop computing company.

Leo Burnett Co., Taiwan, and Leo Burnett USA, Chicago, handle corporate advertising; Acer America's local marketing efforts are directed by API Communications, Fremont, Calif.


Acer has struggled in recent years to build its brand in North America and move from the No. 8 or 9 position in the tech food chain into the top five occupied currently by Dell, IBM, Compaq, HP and Gateway.

"The U.S. is a very tough market," said Max Wu, president, Acer America. Mr. Wu pointed out that Acer is one of the top three brands in the Asia-Pacific region and is growing rapidly in Europe. It's also one of the biggest original equipment manufacturers in the world, building computer hardware for IBM and other major tech players.

In the U.S., though, Acer has hit some bumps. In early 1999, it pulled out of retail sales when its Aspire PC couldn't compete with aggressive pricing and marketing of rivals.

Helping propel Acer's aspirations are two new Acer America business units that the company hopes to spin off in the future: Acer Neweb, which will market an array of wireless devices to both consumers and small to medium-size businesses, and Acer Nexus, a venture designed to offer local area networks and related networking solutions. Acer will go up against tech titans in these arenas as well: networking giants such as Cisco Systems, Lucent Technologies, Nortel Networks and 3Com Corp.

In the second quarter, Acer will also market a mobile phone in the U.S. At last week's International Consumer Electronics Show in Las Vegas, the marketer showed a variety of devices designed to enable quick access to e-mail and the Internet. It's likely to cooperatively market set-top boxes with telcos, Internet service providers and cable operators. Acer's advertising efforts will focus on promoting its new generation of products, whether they're Acer-branded, co-branded or bear another company's logo.


Four new TV spots, developed by Burnett, will showcase Acer's products and position it as an innovative leader with unique capabilities and the ability to offer bundled hardware and services to small and medium-size businesses, local governments, educational institutions and the like. The first likely will break in April.

"The spots focus on branding Acer as innovative and reliable," said Todd Osborne, senior director of marketing. One spot will help promote a new Acer TravelMate laptop PC in April; another will focus on an Internet appliance. Two others will be brand-oriented. Acer expects to step up targeted advertising in channels as diverse as trade, consumer print and interactive.

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