Having once made a PC that retailed at £139, a Scottish PC builder claims it is now beating the likes of Dell by doing the exact opposite - specialising in high-end systems with a price of up to £16,000.
Kilmarnock-based Utopia Computers says its average selling price hit £2,500 in 2016, which observers say reflects where the market is moving more generally.
That is a far cry from Utopia's initial tactics when it first pushed into PC building at the turn of the last decade, according to director Craig Hume.
"Believe it or not, we started at the opposite end of the market, and we built the cheapest Windows 7 PC in the UK - with a Windows 7 licence, it retailed at around £139," he said.
"But we were only the cheapest for a matter of weeks, and I think Novatech undercut us. We learned it was a very silly business to be in, so we flipped it on its head and decided we were going to build the best."
Utopia now sells about 60 systems a month, with 40 per cent of sales into businesses and the remainder into professional home users, Hume said.
There is a little system builder community, and there's a lot of respect there, at least from my end
Utopia offers a 10-year limited warranty and lifetime technical support, while prospective customers are assigned a Utopia employee who will build the computer and be their port of call for the life of the PC.
"We originally focused on gaming, but then we realised the real potential for us was in workstations and people using their computers for professional applications - such as rendering - anything that uses GPU or CPU power," Hume said. "Through focusing on that we've managed to move our ASP up last year to £2,500, which is cracking when all the retailers are still thinking that the £179 laptop is where it's at - and no one can make any money on that."
It sold its highest-value desktop PC ever, at £16,000, last year, which it billed as its most successful ever, with turnover up 20 per cent.
Utopia plans to up the ante this year by introducing machines with four CPUs and eight GPUs, with the plan to double the ASP again to £5,000.
All assembly is carried out in Kilmarnock, and Hume said the firm is looking to upsize to a larger local base rather than shift any production to the Far East.
"Our clients seem to be less cost sensitive," he explained. "Often they come to us and say they had a quote from Scan or Dell or whoever and we're quite a bit more expensive. That's our opportunity to show why we're different. That [price competition] may well be an issue in the future, but for now I can't see how we won't be competitive manufacturing from where we are."
Flawed by an onslaught from multinational A-brands such as Dell and HP, the noughties saw a spate of bankruptcies in the local system builder space, but Hume claimed that focused outfits which pick a good niche are continuing to fare well.
"I wouldn't say that retailers are crawling back into building systems," Hume (pictured) said. "Unless you're going to really focus on it, you'll probably struggle to make it work. But for system builders who find a USP and run with it, I think the bigger guys are struggling to compete with that; they are struggling to compete on services, product range, and availability of the latest technology. There are definitely gaps that a focused system builder can capitalise on."
Hume name-checked gaming-focused Overclockers, Yoyoyech and DinoPC as UK-based competitors he respects.
"I look at Overclockers and I love what they do with the eight-pack themed systems; they are all about adding value to what it is they do and I respect them a lot for that," he said.
"Interestingly, there is a little system builder community, and there's a lot of respect there, at least from my end. We met them all for the first time seven years ago when we were thinking about what direction to go in, and in various ways they have all helped us crystallise the idea of what we wanted to do. I would do the same for any start-up system builder that wanted to do the same."
Paul Cubbage, managing director of Target Components, said the distributor is currently building 400 to 500 white-label systems a month for its retailer and reseller customers, a figure he said is rising year on year.
The distributor now offers a custom PC configurator for its channel partners to use in their stores.
"The indies [independent retailers and resellers] that are doing best at the moment are doing it on the back of system builds," Cubbage said.
"Utopia is a great example of where people are coming to them for expertise and the fact that their ASP is at £2,500 shows the level of business and desire that's out there."
Cubbage agreed that demand for high-end systems is rising.
"For one of the ones we did through the In-Store PC builder, the customer of ours knocked out in excess of £10,000 for a PC, which is crazy money," he said. "We supplied all the parts and built it. The total cost to him was something like £3,000 or £4,000, so he made 60 to 70 per cent margin. It's very healthy at the moment. The beauty of the indies is that you are going to get exactly what you need, not what PC World wants to sell you."
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