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Acer slates Microsoft's hardware push

By Paul Sandle

LONDON (Reuters) - Acer, the world's fourth largest PC maker, has dismissed Microsoft's chances of becoming a rival to Apple by building its own devices and urged its software partner to focus on its new operating system instead.

Microsoft announced on Monday that it would design and sell its own "Surface" tablets to showcase Windows 8 and take on Apple and Google in devices that are capturing more and more of the computing market.

It kept PC makers largely in the dark about its plans, according to sources, marking a radical departure from its previous close collaboration with its hardware partners.

Oliver Ahrens, Acer's senior VP and president for Europe, Middle East and Africa, said Microsoft was trying to copy some of Apple's strategy, but he was doubtful it would succeed.

"I don't think it will be successful because you cannot be a hardware player with two products," he said in an interview, adding that the former darling of the tech sector would also have to adapt its brand to compete with Apple.

"Microsoft is working with two dozen PC vendors worldwide, including the local guys, whereas Apple is alone, it can more or less do what it wants," he said. "Microsoft is a component of a PC system. A very important component but still a component."

He was also worried that Microsoft would shift resources to building a consumer hardware brand and retail operation, and in the process take its eye off the ball in making sure Windows 8 was a success for the PC industry.

"Instead of enhancing the user experience for Win 8 (...) they open a new battlefield," he said.

"I worry that this will lead into a defocus internally for Microsoft, and then we have to suffer because we are working with their products."

OLYMPIC PERFORMANCE

Taiwan-based Acer, which ranked fourth in PC shipments in the first quarter, has had its own problems after failing to adapt to changes in the market including in particular the rise of Apple's iPad last year, but Ahrens said the group was now getting back on track.

He said Windows 8, which does not yet have a launch date, was "extremely important" for Acer, and it would have four or five devices tied in with its launch, including tablets and a high-definition slimline "Ultrabook" notebook.

Ahrens said the new products would be supported by an advertising campaign focused on the user experience rather than the specifications of the machines, which has been the traditional approach of PC makers.

"Acer wants to be more about value than volume," he said, adding that the company needed to do higher end products to lift the status of the whole brand.

Acer, an Olympics sponsor, will also be in the spotlight next month as the PC provider to the London games.

"Everything is run by Acer - the scoring systems, the internal IT," said Acer UK managing director Neil Marshall. "It will demonstrate that we have the commercial ability to deliver this type of project."

Ahrens said the second quarter, which ends in nine days, would see about a 50 percent rise in revenue in the Europe, Middle East and Africa region, as the group continued its recovery from the lows of a year ago.

The region accounted for 37 pct of revenue in the first quarter, according to a company presentation.

"Q3 will be more challenging because it's a transition quarter from Windows 7 to Windows 8," he said.

(Editing by Anthony Barker)

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