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 Not that we put that much credence behind speculation that Dell Inc.'s (NASDAQ:DELL) next big acquisition would be of a major PC maker -- namely Taiwan's Acer Inc. But this week Brian Gladden, chief financial officer of the the second-largest PC maker, squashed the notion further by telling Bloomberg that chasing market share by acquiring Acer, the No. 3 player in the market, "would be very low on our list of opportunities."Speculation about a Dell-Acer deal was fueled in large part by a Bernstein Research report a few months ago that suggested such a tie-up would make sense because of the two companies' complementary business models. And Acer chief Gianfranco Lanci agreed recently that the PC industry could use a dose of consolidation. Although numbers released Wednesday by Gartner suggest that the PC industry is showing small signs of recovery, it is still in a world of hurt, with the number of units shipped this year set to contract more percentagewise than ever before. Acer pretty much caught up with Dell in second-quarter unit shipments -- Dell moved 9,259 desktops, laptops and X86 servers, while Acer shipped 9,196, nearly tying the Texas PC maker for second place behind Hewlett-Packard Co. (NASDAQ:HPQ), according to Gartner. But as Dell CEO Michael Dell told a gathering of financial analysts earlier this week, his company isn't interested in a unit shipment battle with Acer. Acer boosted its position largely by selling netbooks, the popular, no-frills and tiny laptops aimed primarily at providing Internet access. "We're focused on profit-share, not market-share," Dell said, according to the Bloomberg report. So it's no surprise Gladden and Dell's new corporate development chief David Johnson, who was recently poached from IBM Corp. (NYSE:IBM), are more likely to focus on higher-margin acquisitions that expand the company's existing businesses profitably or move it into new growth areas. One area Gladden pointed to was systems management software used to run computer networks and server banks. The data storage market is an obvious place for Dell to look, following its $1.4 billion purchase of EqualLogic Inc. in 2007. While Gladden said the company would look at deals with price tags as high as $8 billion, smaller transactions would be preferable as they carry less risk. "If we can go buy 10 more EqualLogics for $1.5 billion each, and execute as well as we did on that one, it will change the whole company," he said. "If we go buy one $9 billion asset, that's one set of risks. If we go buy several smaller ones, you probably have a better chance of being successful." Check next week's issue of The Deal magazine for more on consolidation in the PC industry. - Olaf de Senerpont Domis
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