LONDON, Sep. 24, 2007 (Thomson Financial delivered by Newstex) -- Gianfranco Lanci, president of Taiwanese personal computer vendor Acer Inc, said in an interview with French daily Le Monde in its Tuesday edition that his company's takeover of US PC vendor Gateway Inc (NYSE:GTW) will make the combined entity the third largest PC vendor in the US, with 12 pct market share.

Lanci said the deal will enable the group to make large economies of scale.

It will also strengthen the combined group's position in Europe, where Acer was already number one in the laptops sector, he told Le Monde.

Gateway is also taking over Packard Bell BV parent company, PB Holding Co. The Acer president said the acquisition of Packard Bell will allow the combined group to accelerate its growth in the office computers segment, in which PB is well known.

Lanci said large computer brands were suffering from low operating margins, and that the reason behind Acer's takeover of Gateway was principally to improve its operating margin, which has been fluctuating between 2.5-3 pct, against the industry's average of 3-4 pct.

When asked by Le Monde whether it was a disadvantage for Acer to have sold its factories in 2000, Lanci replied: 'We are not the only ones to no longer be the owners of our factories; that is the case with all the other big PC brands.' He explained that production units can only be profitable if they have enormous volumes, and that even with Gateway and Packard Bell, theirs would not be large enough. Most of the world's portable computers are manufactured by just three or four ODMs (original design manufacturers), in gigantic factories which are mostly located in China, with some being transferred to Vietnam, Lanci said.

When asked whether Microsoft (NASDAQ:MSFT) will continue to lose market share for its operating system, Lanci said: 'When you hold over 90 pct of a market, it is much easier to retreat than to continue progressing.'
He added, 'I think Microsoft will retain a very strong position in the next one to two years. But in the next five to ten years, the competition environment will definitely be different, because of the internet and other competitors.'
Lanci said Acer is already offering computers with the Linux operating system, (the rival to Microsoft's system), in eastern Europe, the Middle East and Asia. But it is not yet offering Linux in western Europe or the US, where demand for it is still weak.

Le Monde also questioned that, as Lanci is Italian, as Acer no longer has any factories in Taiwan, and as Stan Shih, its founder, no longer has an operational role in the company -- whether the group could still be considered Taiwanese.

Lanci replied: 'We have become a global company, with employees coming from all over. But our headquarters is still in Taiwan. Mr Shih owns 6-7 pct of the capital, and still has a seat on the board.'
'Acer is listed on the Taipeh bourse, and we currently don't have any plans to list elsewhere', Lanci said.

(CNNMoney)