BARCELONA - Acer Inc, the world's third-largest PC brand, entered the increasingly crowded smartphone market on Monday with the unveiling of its first eight models at the World Mobile Congress trade show in Barcelona.

We are extremely serious entering this space, Aymar de Lencquesaing, the head of Acer's smartphone business, told a news conference, adding the company plans to break into the top five of smartphone makers in five years.

Acer is the latest in a string of companies to launch its own line of smartphones, with crosstown rival Asustek recently also announcing a tie-up with navigation device maker Garmin to sell co-branded mobile devices.

The company said on Monday it expects the business -- its first foray into mobile phones -- to account for 10 percent of revenue by 2012, as lines between portable PCs and increasingly sophisticated mobile phones start to blur.

The smartphone market has become increasingly crowded in the last two years, with Apple, Research in Motion and HTC winning market share at the expense of top smartphone provider Nokia.

We genuinely believe that we can be actually one of the top five. Over time I hope we can be better than top five, Lencquesaing said.

He said Acer was planning to invest in building up the business before it can turn profitable.

I think it's going to take us anywhere between three to five years, he said. Being the size that we are gives us a fairly sizeable marketing budget. We understand that we need to spend, to create the awareness that Acer is not just a PC company.

Acer intends to develop the business by using its existing sales channels for laptops. It will also use its large scale to get lower prices for some components, Lencquesaing said.

WINDOWS ON BOARD, ANDROID ON DECK

Acer said all eight of its newly launched smartphones would use Microsoft's Windows software, but it was also looking at Google's Android system.

There is a clear interest right now for Android devices, and we believe so too, he said.

Acer expects the cheapest new models to retail for less than 49 euros ($62.70), helped by operator subsidies, while the most expensive models would retail for around 500 euros when not subsidised.

This is a step really showing to the market that they are not playing with one or two devices ... it looks like they are committed to try hard, said IDC analyst Francisco Jeronimo.

The smartphone industry is expected to be one of the few bright spots in the tech sector in 2009, growing 10-20 percent even as the global financial crisis saps demand for tech buys and hurts the bottom line of many technology companies.

However, many analysts point out that the sector is already crowded and new entrants may find it difficult to break into the smartphone supply chain.

It will be quite tough for them to enter carriers' portfolios. They do not have brand awareness in terms of mobile, said IDC's Jeronimo.

They will probably have a small portion of the market in 1-2 year's time, but it is a first good step, he said.

($1=.7815 Euro)

(Editing by Jacqueline Wong)

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