XC bets on information appliances

In a bid to distance itself from the stigma of "just another Taiwanese IT company", Acer has invested more than $180 million in a global product branding and marketing campaign.

Integral to the PC and component maker's game plan is the development of what Acer's CEO Stan Shih calls "intellectual property" (IP).

Shih's IP brainchild stresses the continued enhancement of Acer's core competencies - manufacturing and assembly.

However, in preparing for the inevitable downturn of the global PC market, the company is now relying on internal and third-party software developers to transform Acer from a traditional hardware maker into a competitive software company.

Critical to this transition is the development of Acer's spin on the network computer dubbed the XC.

While still representing little more than vapourware, Acer claims the XC concept will generate huge manufacturing and assembly opportunities as third-party developers discover it as a platform to run applications.

Shih described the XC as a chip-based application-specific digital device, or information appliance, that will initially focus on specific uses such as education, e-commerce and entertainment. He added that if the XC concept was adopted by the market, other applications such as home banking and game consoles could be customised.

"Take, for example, Microsoft's Small Business Server (SMS) - what I would call a general purpose applications server," Shih said.

"This is a classic example of where we could position our XCs. However, instead of using the server to host a number of applications, users could customise their XCs as stand-alone e-commerce servers," Shih said.

But the $64 million question is will application and end users adopt the XC?

Shih is optimistic about the XC's eventual impact on the Australian market but was careful not to raise expectations.

"Volume production is not the be all and end all when it comes to the XC," Shih said.

"With the XC approach, Acer estimates it could ship as many as 10,000 units a year to be a success. Compare that with the idea that most NC players would need to ship one million units to achieve that same success."

Shih predicted that Australia could be a test market for the XC when it is ready for deployment. However, he warned Acer would need to significantly increase its channel infrastructure to penetrate the Australian market.

Whether that partner is a box mover or a VAR remains to be seen, Shih said.

Cameron Tomes travelled to Taiwan as a guest of Acer