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Exclusive: Acer CEO Talks Wearables, Windows 10 and Why Gaming is 'Next Big Thing'

When he was named CEO of Acer in January, Jason Chen was the third person to head the computer maker in a span of two months. Like many notebook makers, Acer was struggling amid lower PC sales. Since Chen came on board, however, the company has rebounded: Its shipments of PCs increased by 11.4 percent in the third quarter of 2014 from the year before, and the company rose to take the No. 4 spot, behind Lenovo, HP and Dell. Chen has also announced that he will take over as chairman of Acer in three years, succeeding Acer co-founder George Huang.

Tom's Guide Reviews Editor Mike Prospero sat down with Chen and got his thoughts on Acer's plans to make a family of products "from 1 inch to 100 inches" and connect them all using the cloud. He also weighed in on the Chromebook wars, the Windows 10 opportunity and gaming PCs, which Chen says "will be the next big thing" for the company.

Tom's Guide:In the nine months since you've been CEO, Acer's fortunes have been revived. To what do you attribute that turnaround?

Chen: I think it's still early to say we've done the job and declare it a success, but we're on the right track. How are we doing it? I would call it a two-fold strategy. On our hardware side, we have to expand and extend what we've been offering — which was PCs — to now PCs, tablets, smartphones, even wearables and projectors. I call it "1 inch to 100 inch."

But it's not just a collection of different hardware devices. We want to connect them together using what we call Build Your Own Cloud, that will connect them as seamlessly and transparently as possible. They will have access to files and music and photos and videos among different devices.

TG: What else are you doing to differentiate the brand?

Chen: With Acer Extend, you will be able to operate your phone from your computer. When you take your phone close to your PC, you will mirror the phone on it. Therefore, you will be able to retrieve, for instance, a photo on your phone and just drag it across.

Vice versa, when you need to retrieve a file from your computer on your phone, you will be able to use voice recognition on your phone and say, "I want to find this and that file or PowerPoint from that particular computer," and you will be able to retrieve it on your phone. Either from a close distance or remotely, we will be able to provide people a seamless experience.

TG: Acer is now the fourth-largest seller of notebooks, according to IDC. What areas are particularly strong?

Chen: We are seeing three areas which are growing and which we're investing in. Number one is Chromebooks. Number two is the 2-in-1 and number three is the gaming market. At this moment, our Chromebook is well positioned. Our 2-in-1 is growing, and we think we're on track in certain parts of the world. In gaming, we're just getting started, and we think it will be the next big thing for us.

MORE: Top 5 Acer Laptops

TG: Why are you getting into the gaming arena now?

Chen: The product that we launched, the V Nitro, is for the casual gaming market, and we believe it's an important entry. I think it represents excitement, passion and is also a good representation of the Acer brand.

TG: Are you looking at the hardcore gaming market?

Chen: Once we're ready, we'll talk to you about that, but we're taking it step by step.

TG: Are you going to use gaming laptops as a way to introduce new designs and features and trickle them down to other products?

Chen: Let me put it this way: When I was talking to our product-line president for the gaming area, I told him we need a different team. We can't assume that a higher-end graphics notebook equals a gaming machine. It's not. They come from different perspectives. People who use gaming computers are a different group of people. Different thinking, different perspectives, different requirements. We can't assume that higher-end, bigger configuration is different, and therefore, we have different designs and considerations — things that normal productivity notebooks will never even have to worry about.

TG: Are you concerned that low-cost Stream PCs will negatively impact Chromebook sales?

Chen: We think there will be some impact, but not a lot, because what Chromebook represents is a different usage model versus regular Windows-based PCs. There will be some overlap, because when people just consider price when they want to buy a clamshell notebook, yeah, it will impact. But it's a different usage model.

TG: 2-in-1 hybrids haven't been a hit with shoppers. Do you see that changing with Windows 10?

Chen: That's a very good question. We see Windows 10 as a new opportunity. It provides a unified platform for applications that will run on multiple platforms. It's a wonderful solution, especially for developers.

You will be able to change the interface from productivity mode to tablet mode. I think it's an interesting feature and an important one. You should be able to optimize the usage for a 2-in-1.

TG: Do you think Microsoft should have brought the Start Menu back sooner?

Chen: Time to market is always important. Creating excitement and new usage is important. In fact, many people asked me, how do I see the PC market? Will it grow or decline? I repeatedly share with these people that demand is coming from the stimulation of new usage. When there is new usage, it creates new excitement, and there will be new demand. We are excited to see new things coming out.

TG: Laptops are getting thinner and thinner, and phones are getting larger and larger. So where does that leave tablets?

Chen: For a mature market, people can afford multiple devices, but in many emerging markets, when they have a budget for only one device, which one do they buy? They will decide which one can do most of the work. We found that phablets could be the one very interesting place because you will be able to use it as a phone, work as a tablet, and to some extent, if people needed to do some productivity work, you could do that, too.

TG: Where do you see the wearables market going?

Chen: It's a fast-growing market, and it's not well defined yet. What do people need it for? Some people say it's all health; some say it's lifestyle; other people are using it to track their sleep.

After collecting all this data, what are you going to do with it? We believe that there will be a cloud infrastructure needed as a back end to not just receive the data but also be able to analyze it. This won't just be for individuals but for communities, so that the data becomes meaningful, other than just how many steps you take each day.

In the future, wearables will be much more narrowly defined. For instance, is the watch very important, or is communication with your phone very important? What about texts? We don't believe that over time there will be 25 different features and functions in one single device because people won't use it. So it will primarily be only a few features, and others will be downloaded as an app. So far, we are receiving good feedback on our first-generation product [the Liquid Leap], and we already have a second generation in line.

TG: What is the one area where you think Acer needs to improve the most?

Chen: There are actually many things that we will have to continue to improve. If there's one thing, I will make sure that we continue to focus on the company's integrity and to continue to improve the trust — consistently and insistently — so that, over time, this is a great company that people trust and respect.

TG: Are there any designs that you're particularly excited about?

Chen: We actually just won an award for our R13 convertible in Berlin. I'm very excited about that. It's a wonderful product. One thing that I ask my team to look at is, to not look at a single product, but look at a product family, so that we will be able to keep some of the very important design components but create a junior product line. So that they have the ingredient, but with a more affordable price. To get a family out of a single product, that will be something that we will be able to do differently.

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