Acer, the Taiwanese IT giant puts on hold its smartphone business in India. The company had set up a separate smartphone manufacturing line and invested quite a lot into the same in recent times. But the endeavors of the company didn’t pay off much and resulted in sales of only 30,000 units in the year 2016. About 97 percent of the revenues for the company are generated from its information technology hardware business even though the company has an established smartphone business for the past 6 years.
The company now plans to shift back its focus to IT business and would aggressively expand its exclusive retail stores across the country for the same. Acer holds 10 percent of the market share in Indian PC market and hopes it revenues surge by a single digit in 2017.
Speaking upon its decision to hold the smartphone business, Harish Kohli, managing director, Acer India commented,
Today, mobiles have become a commodity from a price-point basis, rather than an experience basis. There are very few products based on experience. When you are into that kind of a space, it is a decision you need to take, whether to produce a quality product and bleed or just copy others and make a product for a particular price-point.
Apart from being unable to offer competitive price in India, there are other reasons that add up to its decision. The company didn’t focus upon its distribution network and its devices are sold mainly through e-commerce giants like Flipkart and Amazon. Moreover, Chinese companies such as Xiaomi and OnePlus have established their presence in India by offering competitively priced smartphones. The company’s lack of efforts in marketing and logistics also stands as a drawback.
During Q3 2016, Acer had 0.04% of market share globally which clearly indicates its current direction. Kohli adds,
The change in government policies of Make in India and other aspects, our realisation has been that it is too much of a market which is left to the smaller brands rather than any larger brands trying to enter it at this particular stage.
