Acer is Onto Something in the Premium PC Market (Premium)

While most of the PC market has rallied around gaming and premium PCs for growth, Acer may have found another lucrative market to target. And if it’s right, don’t be surprised to see much of the rest of the industry follow it down this new path.

Acer traditionally holds two major launch events each year, one in New York in the Spring and one in Berlin in the Fall. This year, conspicuously, the firm moved its Spring event, called next@acer, out of Manhattan and into trendy and hip Brooklyn. It also spent an inordinate amount of time during this event discussing a new family of PCs and peripherals aimed at creators called ConceptD.

Those two things are related. With years of success with gaming PCs in particular, Acer discovered something interesting: Not only were gamers using their expensive rigs for non-gaming, often productivity-focused tasks, but creative professionals and other creators were increasingly interested in its gaming PCs because traditional PCs weren’t meeting their needs.

Technically speaking, neither were gaming PCs, as they tend to be big, bulky, and loud, thanks to the increased cooling needs of high-end CPUs and dGPUs. But perhaps there was an opportunity there, for Acer to create what is essentially a hybrid class of PC that takes couples the performance and high-end specs of gaming PCs with the quiet, understated elegant of premium PCs that are often chiefly focused on looks and materials.

“This new idea emerged from our success in gaming,” Acer Co-COO Jerry Kao told me at the event last month. “And as we learned more about creators, and better understood their needs, we realized there was a big potential market there.”

The result, ConceptD, is interesting on a number of levels.

The most obvious is the sheer breadth of the offering: ConceptD doesn’t just consist of a few PCs and the obvious handful of peripherals. Instead, it’s already a broad and deep product family that spans a wide range of price points and collectively should meet the needs of most creators. In that sense, ConceptD isn’t so much an experiment as it is a fully fleshed-out new line of products.

This stands in sharp contrast to Acer’s competitors, which are often quite bigger, especially here in the United States. For example, Dell, HP, and Microsoft all make specialty computers for the creator market—Canvas, Sprout, and Surface Studio, respectively—but each is perhaps most notable for their uniqueness within their firms’ respective product lineups. Or perhaps for their sky-high pricing. Acer, meanwhile, has come to market with several different PCs, both desktops and laptops, and at different price points.

ConceptD also fully embraces the modern role of the PC, which has evolved into a purely productivity-focus device type in the wake of the mobile revolution.

“This isn’t for productivity,” Kao said, holding up his phone. But ConceptD does embrace some positive attributes of mobile—most notably the quiet operation—and brings that to a PC audience that prizes, even needs, quiet.

On that note, the firm has a goal to keep the operating sound output of its ConceptD PCs under 40 dB, a level CEO Jason Chen had accurately described as “library quiet” earlier in the day. And they’ve already achieved it across the board, at least in the mobile products. Obviously, the desktop PCs can exceed 40 dB when pushed, Kao conceded. But that’s to be expected of a tower design.

That’s very specific. But looking at the PC market broadly, we see some obvious trends: First, PC sales, overall, have fallen for over seven years, and while there are some subtle indications that that shortfall might be flattening out, the PC market today is much smaller, over 30 percent smaller, in fact, than it was at its apex in 2011. And second, PC makers have carved out some success in premium sub-markets within the PC market. Those machines are actually profitable.

That’s bad news for anyone who can’t afford an expensive PC: PC makers—and, notably, Intel, which claimed a chip shortage over the past six months or so—have simply ignored or under-served the non-premium parts of the PC market in recent years as they’ve collectively pushed more lucrative premium PC.

But it’s interesting to me that they’ve also underserved the premium PC market, too. After all, what, exactly, is a premium PC? Is it just a PC that is more expensive because it contains more premium components? Is that really all there is to it?

To date, the answer has been yes. Premium PCs have emerged as a way for PC makers to copy Apple yet again and charge customers more, and gain higher margins. Where low-end and midmarket PCs are volume loss leaders for all PC makers, premium PCs are profit centers.

The one exception to this, of course, is gaming PCs. Yes, they contain more expensive and powerful components than typical PCs. But gaming PCs are custom-tailored to an audience, and to specific needs. They are purpose driven.

Other premium PCs are less purpose driven. They’re just nice looking, generally, and made of premium materials. They tend to have more modern features and components. They often come in fancy packaging because Apple has convinced the world that the out of box experience is just as important as the next several years of actually using the thing.

What Acer is doing with ConceptD, I think, is establishing a second purpose driven sub-market of premium PCs. As with gaming PCs, they’re custom-tailored to a specific audience, in this case, creative professionals who, let’s face it, are woefully under-appreciated by Apple, which won’t even add touch and pen support to their Macs. In contrast, ConceptD PCs are also tailored to this audience’s specific needs.

This isn’t just smart, it may be trendsetting. And if Acer is right—and I think it is—then the rest of the PC market can be expected to follow in lock-step and not just build expensive premium PCs, but offer purpose driven premium (and somewhat non-premium) PCs that appeal to specific audiences. It’s not enough to be pretty. The PC has to be true to the platform and right for its customers.

I love this. And I hope tiny Acer is successful, both for itself and inspiring the rest of the industry to wake up and help itself out of its collective haze.