Acer to Acquire E-Ten – Inside the Quiet Takeover of the Glofiish Maker

Acer executives quietly made a decision that felt strategic and a little risky on a humid Monday morning in March 2008. The Taiwanese computer giant announced that it would buy E-TEN Information Systems, a smaller business that is primarily well-known among tech enthusiasts for its peculiar Glofiish line of Windows Mobile smartphones.

The asking price was around $290 million, which was not insignificant at the time but also not the kind of big-ticket deal that makes headlines. However, there was a certain significance to the moment.

The world of technology was changing during those years. Smartphones were starting to resemble tiny computers rather than just regular phones. The iPhone had only been on the market for a year. Android was being prepared by Google. Manufacturers of laptops were both excited and uneasy about this shift.

Back then, one could practically feel the calculation taking place in Acer’s glass headquarters in Taipei. Behind luminous monitors, rows of engineers worked on laptop and netbook designs. However, it appeared that computers would be moving from desks to pockets in the near future. Acer tried to enter that smaller market by acquiring E-TEN.

The history of E-TEN itself was peculiar. The company was founded in 1985 and initially focused on Chinese-language MS-DOS computer input systems. It took careful engineering and knowledge of intricate character sets to do that kind of work. The business eventually branched out into hardware, creating smartphones and other portable electronics.

E-TEN had developed its Glofiish smartphone line by the middle of the 2000s. Compact handheld devices such as the X500, X650, and DX900 integrated Windows Mobile software, Wi-Fi connectivity, and GPS receivers. Neither in Western Europe nor the United States were they well-known. But they had gained a devoted following in some areas, especially in Russia and parts of Asia.

E-TEN seemed to have a deeper understanding of the specialized smartphone enthusiast market than many bigger companies.

However, in the technology sector, scale is important. Furthermore, despite its astute engineering, E-TEN was competing in a market that was getting more competitive by the day. Businesses such as HTC were becoming more powerful. Apple was changing the way that people thought about software design. Budgets for marketing were skyrocketing.

Smaller manufacturers had to decide whether to find a larger partner or grow rapidly in that environment. An answer might have been found in Acer’s offer.

As far as Acer was concerned, the reasoning was simple. The business already held a strong position in the notebook and laptop markets. In actuality, Acer had grown to become one of the biggest PC suppliers in the world after acquiring Gateway and Packard Bell. Computers themselves, however, were evolving. Devices were getting closer to phones, more connected, and more portable.

Executives seemed certain that smartphones would develop into yet another type of personal computer.

Around the time of the deal, Acer executives made the suggestion that “the global smartphone market is expected to grow rapidly.” That prediction seems almost understated when looking at the industry today.

Reactions within the financial community were cautious but inquisitive. Investors appeared to think that Acer was trying to establish a presence before it became impossible to compete in the smartphone market. Purchasing a business that is already producing mobile devices could hasten that endeavor.

Quiet skepticism, however, was also present. It is rarely easy to integrate two technology companies. Cultures collide. Roadmaps for products clash. New management structures require engineering teams to adjust. Whether Acer completely foresaw the complexity of the smartphone market a few years later is still up for debate.

Immediate expertise was achieved through the acquisition. Engineers with knowledge of mobile radios, small hardware, and the peculiarities of Windows Mobile software were brought in by E-TEN. That information was important for a business that specialized in laptops.

In 2008, I could feel the change as I strolled through technology exhibitions, such as Computex in Taipei. Devices in booths got smaller and smaller. Email, navigation maps, and even Office documents were starting to appear on phones. It was getting harder to distinguish between a PC and a mobile phone.

It’s difficult to ignore how that moment was reflected in the Acer-E-TEN deal.

The E-TEN brand itself vanished shortly after the acquisition was completed. Acer made the decision to stop using Glofiish branding on its devices and start using its own name instead. That choice seems almost symbolic to technology historians. Just as the industry was getting ready for explosive growth, a small, creative smartphone manufacturer folded into a much larger corporation.

A subtle sense of timing is at play as you watch that transition take place. At the exact moment when the rules were changing, Acer was attempting to get into the smartphone race.

The ecosystem would soon be reshaped by Android. Apple would keep improving the iPhone. In the world of Android, Samsung would become a titan. Many businesses, some considerably bigger than E-TEN, would find it difficult to compete.

In retrospect, the 2008 acquisition seems to represent a moment in time of a changing industry. Acer was placing a wager that smartphones would emerge as the upcoming generation of PCs. That belief proved to be accurate.

It remains to be seen if the company was able to seize as much of that future as it had hoped. However, the deal carried the subdued optimism of a business attempting to enter the next era of technology at that precise moment—inside conference rooms in Taipei, with spreadsheets open and engineers waiting for guidance.