Feeds

Dell could go indirect with Acer buy - analyst

Model 2.0

3 Big data security analytics techniques

Michael Dell could prove that "Dell 2.0" is more than a marketing throwaway by buying rival Acer, according to a leading Wall Street analyst.

Sanford Bernstein analyst Toni Sacconaghi today laid out a plan for Dell to revive its fortunes by purchasing Acer - a relatively cheap target with a $4bn market cap. Such a move would give Dell broader access to Asian and European customers, a stronger notebook line and a massive indirect sales channel. Of course, Dell would have to give up on everything it holds dear by swallowing its pride along with Acer.

Dell 1.0 rose to the top of the computer kingdom via the lean, mean "Direct Model." The company also relied on a tight research and development budget and a rejection of large, disruptive acquisitions.

This strategy worked well until 2005 and 2006 when Dell's business started to slow. The company is now trying to correct its customer service problems and improve PC and server sales under the so-called Dell 2.0 model championed by reinstated CEO Michael Dell.

Buying Acer could be a quick fix for some of Dell's issues, according to Sacconaghi.

"A combined Dell-Acer would enjoy leading share in nearly every major region of the world, strong products in both the notebook and desktop segments, and far-reaching distribution through both direct and indirect channels," the analyst wrote in a research note.

The analyst - one of the best on Wall Street - stressed that he's heard no rumblings about a Dell/Acer deal. He simply likes the idea.

In order to make the acquisition effective, Dell would of course need to lay off workers who hold similar jobs at the two companies.

With that dirty work out of the way, Dell could expand its business in Europe and Asia - "where Dell's position is relatively weaker." Dell could also gain an indirect sales channel overnight and sell more high-margin laptops.

"While we have no evidence that a Dell-Acer combination is being considered by either party, we do believe such a mvoe could make strategic and financial sense," Sacconaghi wrote. "We believe Acer could help Dell address many of the challenges it currently faces, but would represent a significant departure from Dell's historical track record of acquisitions and from its 100 per cent direct selling model."

While the Acer deal could prove effective, it would sure mess up the Dell college dorm room lore, and the company's penchant for saying the Direct Model is the answer to every problem. ®

SANS - Survey on application security programs

More from The Register

next story
Samsung Galaxy S5 fingerprint scanner hacked in just 4 DAYS
Sammy's newbie cooked slower than iPhone, also costs more to build
US mobile firms cave on kill switch, agree to install anti-theft code
Slow and kludgy rollout will protect corporate profits
Leaked pics show EMBIGGENED iPhone 6 screen
Fat-fingered fanbois rejoice over Chinternet snaps
Oh no, Joe: WinPhone users already griping over 8.1 mega-update
Hang on. Which bit of Developer Preview don't you understand?
Microsoft lobs pre-release Windows Phone 8.1 at devs who dare
App makers can load it before anyone else, but if they do they're stuck with it
Report: Apple seeking to raise iPhone 6 price by a HUNDRED BUCKS
'Well, that 5c experiment didn't go so well – let's try the other direction'
Rounded corners? Pah! Amazon's '3D phone has eye-tracking tech'
Now THAT'S what we call a proper new feature
Feast your PUNY eyes on highest resolution phone display EVER
Too much pixel dust for your strained eyeballs to handle
Hearthstone: Heroes of Warcraft – A jolly little war for lunchtime
Free-to-play WoW turn-based game when you have 20 minutes to kill
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.