Acer Revo: The perfect desktop for an imperfect world

Posted by Rob Enderle, Pricipal Analyst, Enderle Group

Analyst Opinion - The Acer Revo comes at a time of conflict.  It targets buyers who want low cost products that use little energy, do not accept any limitations in using their PC and look cool at the same time. In addition, the best performance parts for a product for this mixed up market comes from Intel which has the Atom platform, and Nvidia, which has Ion. The problem is that Intel hates Ion and is at war with Nvidia.  

Sometimes it amazes me how hard it is to bring out a product that seems so obvious. This Acer Aspire Revo has been born in the midst of a war, but may be one of the best desktop computers ever created.   Let's look at why this was a difficult product to come up with and then close with an overview of the offering.

The world isn't all mobile

The desktop PC market has been flat or declining for virtually the entire decade.  This last quarter, desktop computer sales declined at a pace you would wonder if there will be anyone left in five years who is still buying a desktop system.  Getting people even interested in putting resources into a desktop PC has been nearly impossible for some time and with sales performance and margins falling, anyone pitching a new desktop computer to their executives had to have felt like they were committing career suicide.
 
Yet the world really isn't mobile, people still like to have PCs waiting for them at home and want them increasingly connected to TVs to watch Web video services like Hulu and YouTube as a family. Kitchen PCs, PCs for younger children, and even a PC in the guest room isn't uncommon in many homes and none of these uses really make sense for a Notebook or Netbook. As a result, while the desktop market isn't what it once was, it isn't dead either and my view is we simply have lacked compelling affordable products.
 
In addition, with the increased focus on smartphones, I wonder if what the market will eventually fall back on is a smartphone desktop solution with low cost desktops at work and home, and dmartphones that handle the majority of mobile needs.  

Economy

The economic conditions have folks focused on saving money both in terms of purchase price and in terms of energy. But that doesn't mean people want to buy stuff that looks cheap, that they can't be proud to either show or give as a gift.  Particularly for kids parents want their children to be excited they just can't afford $1000 + PCs, nor do they want to spend more money on energy than they have to.  

They are looking for high quality low cost products that are very power efficient. Fortunately, technology may actually be able to provide this nearly impossible solution.
 

Atom + Ion

This often seemed like some kind of Shakespeare play, a Romeo and Juliette variant for instance, where the perfect couple was being kept apart by warring parents. Intel appeared to hate Ion because, it moves their Atom offering into the mainstream in terms of performance and potentially cannibalizes their higher margin Core 2 offerings. But this has always seemed silly to me. People are clearly not buying a lot at this time. Trying to get higher margins for products people don't buy, based on sales performance, at the moment isn't a good financial strategy. To be successful, you typically try to build products folks want to buy then optimize the costs. Not the other way around. GM and Chrysler are both companies that showcase why doing this backwards doesn’t work well.    

Acer Aspire Revo

This is what makes the Acer Revo so interesting. It came out despite Intel, it is a desktop system, it matches price, performance, good looks, and pride in a way unlike any other currently shipping desktop computer and it is backed by a major brand.
   
This is the kind of risk you rarely see outside of companies like Apple and while Acer lacks Apple's marketing prowess this product may be the perfect product for what is left of the crowd that still prefer desktop over mobile PCs.  

Based around the Atom and Ion CPU/GPU technology core, the product is thin, sexy and quiet for a desktop and about the size of a hard backed book.   It can be configured with up to 4 GB RAM and up to 250 GB of storage internally. It has VGA, HDMI, eSata, and 6 USB ports. It has a four-in-one card reader.   And it will run the Premium versions of both Windows Vista and the coming Windows 7 platform.   With prices starting below $400, this may be one of the best values in a market hungry for them.
 

Wrapping up

My view of the market is that you analyze what the customer wants, even if the customer can't articulate that “want”.  If you look at some of the most successful products like the iPod, iPhone, and Wii, you see companies that anticipated what the market wanted and took risks to create something wonderful. The Acer Aspire Revo has the potential to be one of those products. We'll see if the market agrees when it comes to stores in the next few weeks, we can only wonder what the netbook sized notebooks based on similar technology will do when they show up later in the year.   

Rob Enderle is one of the last Inquiry Analysts. Inquiry Analysts are paid to stay up to date on current events and identify trends and either explain the trends or make suggestions, tactical and strategic, on how to best take advantage of them. Currently he provides his services to most of the major technology and media companies.

The opinions expressed in this commentary are solely those of the writer.