Acer plans first smartphone around end of year

Windows Mobile will power Acer's first smartphone, based on E-Ten technology and due out late this year.

Acer will likely launch its first smartphone near the end of this year or early next year and it will be a Microsoft-based device, the president of the company said Wednesday.

Smartphones will represent as much as 10 percent of Acer's revenue in the next few years, said Gianfranco Lanci, president of Acer, at the company's first quarter investors' conference in Taipei.

People on the lookout for such a device should remember Acer, the world's third-largest PC vendor, owns several brands now, including Gateway of the U.S. and Packard Bell in Europe. Lanci said any smartphone launched by the company could enter the market under any of the brands it owns.

Acer's quick entry into the smartphone market comes largely due to its NT$9 billion (US$297.3 million) agreement last month to purchase handheld device maker E-Ten Information Systems of Taiwan.

E-Ten has developed and sold several smartphone models over the past several years, including its Windows Mobile 6.0-based Glofish smartphone with GPS (Global Positioning System), in addition to other handheld electronic devices such as GPS devices and pocket PCs.

Acer plans to focus on smartphones. E-Ten has already stopped selling PDAs, and GPS is already becoming a standard part of other devices instead of just on stand-alone gadgets, said Lanci. "We won't get involved in the cutthroat market for voice-style mobile phones," said J.T. Wang, chairman of Acer. He believes the E-Ten purchase puts Acer at the forefront of the trend for computing and communications functions to converge in a single device. The company plans to sell its smartphones through mobile phone network operators. It takes six to nine months to convince an operator to market a new smartphone, said Wang. Acer will use its existing relationships with telecommunications companies to speed up such sales.

E-Ten has only sold its handsets directly to the retail market in the past. The boards of directors at Acer and E-Ten have already approved the deal, but they still face shareholder votes and approval by government regulators. The companies expect the deal to close in the third quarter of this year.

The E-Ten deal follows a string of acquisitions by Acer, including the purchase last year of PC maker Gateway and the recent deal to buy Packard Bell, the European electronics maker.