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Monday, February 01, 2010, 05:25 am PT (08:25 am ET)

Apple's iTunes advantage keeps Acer from building iPad challenger

Citing the strength of iTunes and the App Store, the president of PC maker Acer said his company does not have plans to launch a touchscreen tablet to compete with the Apple iPad.

Acer Taiwan President Scott Lin said Acer could technically create such a device, but it does not fit into the company's business model, according to DigiTimes. The strength of the iPad, Lin said, will lie in its connectivity to iTunes and the App Store, which now offers more than 140,000 software choices.

"Historically, closed platforms are typically limited in terms of scale and are confined to niche markets," the report said. "Apple has built is business out of carving its own niche, which means that while Apple could see success with devices like the iPad, other players are unlikely to be able to replicate its result simply by copying, Lin noted."

Apple plans to expand its online stores with the new iPad iBookstore. As part of the iBooks application, it will allow instant download of best-selling titles from major publishers that can be read on the iPad. The iBookstore will be in addition to the App Store and the iTunes Music Store.

While Acer has no experience in building an online store, and has no plans to get into that market, the company plans to continue to build thinner and lighter notebooks. Lin said his company he does not see the laptop market segment being impacted by Apple's iPad, even with its $499 starting price point.

Lin said Acer expects traditional, full-size notebooks to account for 50 percent to 60 percent of its sales in the coming year, while ultra-thin notebooks will take between 20 percent and 30 percent. Low-cost, low-power netbooks are forecast to represent about 20 percent of Acer's business.

In the fourth quarter of 2009, Acer was the second-largest PC maker in the world, capturing 12.5 percent of global sales. In the u.S., Acer was the third-largest PC manufacturer. Its 11.9 percent domestic share put it ahead of fifth-place Apple, which had 7.4 percent.

In another report, DigiTimes said computer maker MSI has an iPad competitor known as the mPad, based on the Google Android mobile operating system. That touchscreen tablet device, based on the nVidia Tegra chip, will see mass shipments "as soon as the market demands it," MSI Chairman Joseph Hsu said. The company also plans to shelve its development of e-book readers.