Acer to spin off services group

Acer Computer's Australian operation is planning to spin off its services business into a separate entity, called Hi Point, by the fourth quarter of this year.

For several years Acer's services division has been providing break-fix services to customers that purchase Acer-branded products. It now plans to form agreements that will allow its 100-strong repair team to service other vendors' products.

The business unit has begun trialling the repair of competing products, but Acer Australia managing director Charles Chung declined to name any of the vendors, saying such negotiations were commercial in confidence.

It is believed that at least one notebook vendor, UK's Hi-Grade, intends to be one of the first non-Acer products off the rank.

"It's getting harder to make profits in this business," Chung said. "We feel that by capitalising on our competencies, we can generate services revenue for Acer. We have spent many years building up a sophisticated business. We have reached a level of maturity and now we want to leverage the processes and capabilities we have in place."

Acer's spare parts management and call centre operations are two such competencies Chung believes will be of benefit to other vendors and their customers. "There is plenty of business in this area, and there are many vendors looking to outsource."

Initially, Chung will align the Hi Point business with Acer's existing service capabilities, namely the repair of desktop and mobile computers, but Hi Point is eventually expected to be able to support a range of products outside of PC technology, such as networking technology and handheld computers.

The Hi Point concept is not new to Acer -- it has succeeded in spinning off its services business in both Taiwan and Malaysia. In both cases, Chung said, the initiative was successful. With Acer currently sitting at number three on the PC vendor ladder, Chung feels it is time to take the next step and create services revenue opportunities in Australia.

Chung said the business proposal for Hi Point is still being finalised, but he hopes to have spun off the division by the fourth calendar quarter. Hi Point will be based in Sydney, but will have branches in Melbourne and Brisbane where the vendor already has established repair centres and onsite engineers.

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