Acer says to make Android phone in 2009

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Wed May 20, 2009 1:31pm EDT
By Tarmo Virki, European technology correspondent

PARIS - Acer Inc, the world's third-largest PC brand, plans to introduce a phone model running on Google's Android software this year, the head of its phone unit said on Wednesday.

The company plans to sell this year around 10 models, with all but one using Microsoft's Windows Mobile software.

Aymar de Lencquesaing told the Reuters Global Technology Summit in Paris Acer was seeing a lot of benefit from its laptop offering when looking for operator-partners to sell its smartphones.

Acer entered the market for smartphones -- mobile phones that offers advanced computer-like capabilities -- this year following the acquisition of Taiwan's portable device-maker Eten Information Systems Co in 2008.

The fast growing smartphone industry has emerged as a battleground between traditional phone-makers and PC makers with Asustek, Hewlett-Packard, Lenovo, and Dell also eyeing the growth market.

Gartner said on Wednesday it expects smartphone market to surge 27 percent in 2009, while the overall phone market would shrink.

In February the world's top cell phone maker Nokia said it was looking also planning to expand its product offering, looking to enter the laptop business.

While strong profit margins in the smartphone industry attract PC brands, the attraction of the low-margin computer industry, where scale is the key to profits, is less obvious.

"For a handset maker to move into the PC business -- I'd say it was almost impossible," de Lencquesaing said. "One way is acquisition, another way is -- if you're willing -- to invest massively and lose a lot of money for a long time."

"If you do not have large volume then you're at such a handicap ... it's very hard to compensate."

Aymar de Lencquesaing said Acer has prioritized around 40 operators to sell its phones through.

"We're in discussions with all of them. To date none of them has said 'thanks, but no thanks, and never come back,'" he said.

Acer aims to reach 6 to 7 percent of the smartphone market by 2012-2013, boosted by volume growth of cheap smartphones.

De Lencquesaing said the company had no plans to introduce mid-range feature phones, but said it sees smartphone prices falling quickly to similar levels.

"Late 2009, we're releasing a smartphone... full touch, at the price of feature phones today," he said.