Acer is betting that users will want to buy smaller desktop PCs this year and next, a boon for a company already specialising in laptops. The company also said it plans to launch a smartphone by the end of this year or early next.

The company this month began selling small, desktop PCs in Europe and parts of Asia with prices ranging from $299 to $499 (£160 to £265), depending on their configuration. They have systems based on microprocessors from both Intel and AMD.

And executives at the company believe they have a great opportunity in the segment since the design of a small desktop is similar to that of a small laptop PC.

"It's a great opportunity to find we can run the desktop business like our notebook business," said J.T. Wang, chairman and chief executive officer of Acer..

One small PC on display at a meeting in Taiwan, the AcerPower 1000, was equipped with an AMD Sempron 3200+, 512MB of DDR2 (double data rate, second generation) DRAM (dynamic RAM), a DVD player and an 80GB hard drive. The company also had an Intel-based small PC on display, dubbed the Veriton, but did not disclose details of the model.

The small PCs will be tailored to different users in different markets. A premium small Acer PC could come with an Nvidia graphics card, a hard drive up to 400Gb, and other premium parts, the company said.

The company expects the small desktops, along with other products such as LCD (liquid crystal display) TVs and smartphones to drive growth for the company.

The smartphone will be launched within the next few months, but executives were sketchy on details, saying only that it will be like a PDA (personal digital assistant) that will handle email and Internet browsing, with phone functions.

"It's much more smart than phone," said Gianfranco Lanci, president of Acer. Acer has no plans to enter the mobile phone market, he said.