Talk me through the landscape for home computing and PCs in the Middle East region.
Over the last years since the pandemic started we’ve seen a total transformation for the PC industry everywhere in the world, and that applies to the region here as well. In many ways I think people rediscovered how important the PC was for them to study remotely, to game remotely, and to get connected to the rest of the world.
The industry went through two years of really, really good growth. In our case, we had almost one third more business in two years. So we went from literally $8 billion to $11 billion [revenue], which is pretty fantastic. The region here followed, we did even better here in some ways because we started to open new markets.
The industry in general was limited more by supply than by demand. Of course, it starts to change now, so as usual those shifts happened pretty fast. But the region here is important to us. We still believe there is potential here, markets like Egypt, for instance, are just starting. We already do pretty well in KSA and some of the other countries here, but there’s still a lot of potential. And I think the demand has been somehow a little bit underserved in the last few years in certain areas just because of supply shortages.
What kind of devices were customers looking for?
Initially, there was a feeling that people would be looking probably more for an education type of device, a little bit entry-level just to stay connected. But in reality, we were surprised to see not only gaming doing super well, but, in general, the whole industry going for better configurations. I think it’s linked also to the fact that a lot of people were at home and, while we talked a lot about learning and distance learning, when you were at home with a lot of time in front of you, you also needed to game, so I think this helped gaming.
Of course, we’ve also had a phenomenon where usually you were working on and doing a lot of things on your phone and you had this old PC from two or three years ago to do homework time-to-time or to print something that was not critical to your digital life because you it was very phone-centric, now people have suddenly needed to do video conferencing, needed to do remote working, they realised, “no, the PC is still a very important device for me.”
In that case, I think people were willing to invest more in their PC and we’ve been surprised to see not only the volume of PC sales going up dramatically, but also the value. People were buying more expensive PCs, and they were really resonating with battery life, with the quality of the camera, the quality of the sound, features that we were always selling in the industry, but maybe people were not buying it so much. They’d rather invest in phone or other device. So we’ve really seen both value and volume going up.
Where do you see the importance of these features going? What kind of features are you building on to keep your customer base and grow it?
I think this is why I said the growth will probably not be there anymore, but the fundamentals of the PC coming back to the centre of digital life is there for some time. I think there is no question that in the past, customers were even wondering why they needed a camera on a PC. Now they’ve experienced two years of doing video conferencing. This is not going to go away when they buy their next PC.
A customer is not going to say, “Okay, finally video conferencing is behind me.” I think this video conferencing will transform our lives for a long time, especially in the business life. I think a lot of trips that you were doing on one day or visiting or meeting a customer for a short time, it’s perfectly okay to do online now. Not only do you save time, but you have this whole dynamic of protecting and saving the planet and not doing trips. So I think this challenge is there for good.
I think the average price of a PC will stay up, I think people will look for those features now. But you know, as an industry we need to adapt to less growth, definitely, and stay nimble. This is why in Acer we’ve always insisted that while PC is the core of our business, we want to grow adjacent businesses, we’re good in monitors, we’re good in projectors, and now we are expanding more and more in accessories.
We’ve started to look at where the brand could play, we’re looking at electronic e-scooters, devices like this, where we could we could use the brand, because we know at some point the growth in PC is going to be a little bit more limited.
The question around sustainability, especially for electronics, has grown hugely among consumers. How are you addressing it?
This is really, really at the heart of our strategy now. We were the first one to announce a true Green PC strategy, not just a product, because we have a product, the Acer Vero that we announced almost a year ago, but now we have announced that this is going to be a family of products. So it’s a product line.
We’re going to have Chromebooks in that product line, desktops, monitors, everything. Of course, with pushing the boundary on how green a PC can be, the Vero was 30 percent PCR [Post-Consumer Recycled plastic] in the entire chassis. Sometimes [other businesses] use PCR in the keyboard or somewhere else and claim it is green, but this is ABCD the whole chassis, the keyboard.
Then we add some software to manage the battery life, so if you don’t watch a video or if you’re not gaming and you need to optimise your battery because battery cycle counts. We went into a lot of detail. I mean the Vero, for example, has some logo engraved on the chassis so you don’t need to put stickers, all the packaging is 100 percent recycled material, no plastic. We want to make sure we tell the story and this is really, again, a product family, this is not one product and is a strategy to be the green company.
Where are you are perfectly right is that this is one step. Make your PC greener. But the second step of course, which sometimes can be seen as a little bit difficult for players like us where you want to sell a lot out of PCs, is to make the PC easier to repair, to make the PC more sustainable, and to have the entire lifecycle of your PC prolonged and now, in the Vero line, we made some inside components replaceable, which was not the trend. We’re using normal screws so it can be more easily repaired. So we also are conscious that reparability and durability are part of the brand story, otherwise you’re only telling half of the story.
And of course a lot of people are asking us, “But truly are you going to do it because then you may sell less PCs?” But we don’t think so. Because now, as you said, the consumer is so conscious that if your brand and your company can be seen as genuinely committed to ESG, I think what maybe you lose on hoping your PC will last one more year, you gain in overall branding image attractivity. So it’s still a win-win proposal.
Of course, a company needs to find ways that green is still supporting the company. I don’t think any company will be green against their business, you need to find a way to be green that is a business driver, but so far we’re very, very pleased with what we’ve seen with the Vero, the sales are good.
The consumers are really voting with their wallets, because, in reality, it’s slightly more expensive to do PCs like this, because PCR technology, using recycled plastics and getting the same durability, look, and feel, requires investing more. But we’re convinced this is going to be the major strategy for us in the next few years. And so far we’ve been very good at coming with the first products, getting to shelf, and convincing the end user about the story.