ABKO, a leader in gaming peripherals, is expanding into digital education with tablet charging stations that streamline device management for modern learning.
Korean SMEs have experienced exponential growth over the past 10 to 20 years. However, with an increasingly saturated domestic market, many SMEs have reached a point where their growth has slowed, despite holding leading positions domestically. This situation often pushes them, as in your case, to explore international expansion. How important is it for Korean SMEs to pursue global markets? As they do, what opportunities and challenges should they expect to encounter?
Our foundation in gaming gear allowed us to go public. While the gaming gear and computer peripheral markets have seen explosive growth, recent shifts, including the COVID-19 pandemic and changing cultural trends, have led to some slowdowns in the gaming industry. We’re now focused on stabilizing our domestic operations while actively pursuing global expansion. Even before going public, we emphasized exports by participating in international exhibitions and seeking overseas partners and buyers. Now, we're strategically preparing to enter new global markets.
In terms of opportunities, while the gaming industry has recently plateaued after its explosive growth, I believe it’s poised for another boom. We’re positioning ourselves to stay ahead and capture momentum when the next wave hits.
How do you see Korean products, including your own, competing internationally? What qualities should consumers associate with Korean products when making their purchasing decisions?
Around a decade ago, the Korean gaming industry saw rapid growth, driven by exceptional game development and the growing demand for high-quality hardware that enhanced user satisfaction. This growth opened a niche market in gaming hardware that we tapped into by delivering superior tactile feedback and responsive keystrokes, which we achieved through rigorous testing and a keen focus on user preferences, particularly in PC cafés.
This expertise has given us a competitive edge, especially in Southeast Asia’s expanding PC café market, where we’re currently focusing our sales efforts. In markets like the EU and the US, where premium brands dominate, we’re emphasizing our products' enhanced keystrokes and competitive pricing. Interestingly, these premium brands don’t prioritize PC cafés as much as we do, which is a gap we aim to fill with tailored products for that environment.
In 2023, the gaming industry was projected to reach over $180 billion in revenue, with 20% attributed to PC gaming. Interestingly, last year, the PC gaming segment grew faster than any other, with an 8.9% year-on-year increase, while mobile gaming actually declined. How do you see the future of the gaming industry, and particularly the growth potential in the PC gaming sector?
With Korean game developers constantly working on innovative new games, we see a promising future ahead. Since our growth is closely linked to their success, we’re optimistic. Although some gaming companies are currently experiencing a slowdown and struggling to release highly appealing new games, I have a positive outlook for the industry as a whole. We’re focusing on developing premium, high-performance hardware that will appeal to dedicated gamers, with enhanced features and quality to match the cost. Even PC cafés are requesting higher-spec, premium products, which points toward increased revenue and operating profit for us in the future.
All industries are experiencing disruption from technologies associated with the Fourth Industrial Revolution. We’re seeing innovations like AI, VR, and other advanced software and hardware becoming mainstream. How do you think these technologies will impact the gaming industry? Specifically, what impact could they have on the peripherals market?
In line with advancements in the AI industry, we have developed the Copilot Keyboard, which is set to launch soon. By integrating a Copilot shortcut key into the keyboard, users can easily access Copilot functionalities. As keyboards are other hardware integrate more seamlessly with advanced software, we believe the potential for AI-driven gaming is immense. We are closely analyzing how key players are incorporating these features and are committed to staying ahead of this trend.
Are there any specific technologies, such as AI, VR, or AR, that you’re particularly excited about?
Both AI and VR hold tremendous potential for us as a company specializing in computer peripherals. We’ve already integrated VR functionalities into our products for the education sector, which we see as a growing area. Alongside this, we’re continuing to push forward with focused R&D in these areas.
Since its founding in 2001, ABKO has established a dominant position in the domestic market by providing high-quality computer peripherals tailored to gamers and PC enthusiasts. The company has also diversified into home appliances and PADBANK. Could you share ABKO’s vision?
Our core focus is on the gaming and education sectors. We believe the gaming industry will remain sustainable, especially with the anticipated resurgence of PC cafés and the rise of AI-driven games. In education, we see this as a powerful growth opportunity due to our technological expertise and market presence. As you may know, the Korean government is actively pursuing its digital education initiative, including the adoption of digital textbooks. We currently hold around 80% of this market with our PADBANK, which plays a central role in the digital learning infrastructure.
The first phase of this digital initiative will conclude in two years, with a second phase set to follow. Globally, education is just beginning its digital transformation, and charging solutions like our PADBANK are crucial for supporting these digital environments. This is why we are in discussions with countries in Southeast Asia and Europe to explore potential markets. Additionally, our fifth facility in Gimpo, set for completion next April or May, will serve as a production hub to support our global expansion in PADBANK.
PC cafés are poised to play a major role internationally and are expected to drive growth in the gaming sector. You mentioned that legacy brands aren’t focused on PC cafés, which has opened up opportunities for ABKO. Given that PC cafés typically require high-spec equipment to attract customers, how do you plan to increase your market share in this sector?
Over the past decade, we’ve secured 90% market share in the PC café segment by addressing the specific needs of these environments. PC cafés are public spaces with heavy traffic, making keyboards especially susceptible to dust, food spills, and wear and tear. By focusing on these unique demands, we introduced our innovative optical keyboards, the first to be commercially viable in Korea. Our keyboards are waterproof and dustproof, unlike those from other industry leaders, which don’t offer these features. This durability has been well received by PC café owners, who appreciate the reduced maintenance and replacement needs.
Our products have also gained attention in Southeast Asia for these qualities, which save café owners the hassle of frequent replacements. Moreover, our keyboards offer excellent tactile feedback and are virtually defect-free, which enhances the user experience and makes them ideal for high-use settings like PC cafés.
You mentioned the construction of a new facility set to open in the second quarter of 2025. Could you walk us through your product development cycle, from innovation to manufacturing, and discuss your approach to product lifecycle management, particularly with your after-sales services that enhance customer satisfaction?
One unique aspect of the Korean market is that consumers here are early adopters, quickly embracing new trends. This dynamic has made it challenging for legacy brands to penetrate, while our high-quality products have set a standard that even global and Chinese competitors are now mimicking. To stay ahead, we’re shifting toward premium products with enhanced features, such as our three-mode function. Previously, our products were priced around 60,000 KRW, but we have now moved into a higher range of around 150,000 KRW.
Our R&D team at our Magok headquarters is dedicated to refining the software within our hardware. We also have highly effective marketing and sales capabilities and are known for our exceptional after-sales service, which goes beyond addressing defects to provide support for the advanced functions in our products. Soon, we’ll introduce AI-driven chatbots trained on extensive data to address customer inquiries more efficiently, further improving user satisfaction. Additionally, we have optimized logistics within Korea to ensure seamless delivery and support.
Recently, ABKO launched the UD50 Blue Whale ARGB BTF case, designed for high-performance PC builds, and the retro-inspired CK80 keyboard. What impact do you anticipate these products will have on ABKO, and what can we expect from your future product releases?
UD50 Blue Whale computer case
The UD50 case has a unique “Seaview” design, which is trending in popularity. Our BTF (Back to the Future) concept is featured in this case and offers a hidden connector for a cleaner look on the main board. It's also compatible with a USB-C port, enhancing performance. Since keyboard performance in this industry is largely standardized, we’re focusing on creating visually appealing designs that enhance the interior aesthetic.
Our keyboard development is guided by three strategic directions. First, we’re enhancing speed with our second-generation optical switch—a magnetic switch that debuted last month, which delivers faster input for gaming and is receiving strong consumer feedback with frequent reorders. We expect this trend to expand into the PC café sector. The second focus is on premium, contactless keyboards that offer high-quality, high-price options. Finally, we’re creating affordable products to compete with Chinese and other budget-friendly offerings.
ABKO has developed a niche approach, managing everything from planning to incorporating consumer feedback, especially with the enhanced software within our magnetic switches. We’ve successfully pioneered this area, attracting a growing consumer base and setting new industry standards. We believe these unique selling points will also strengthen our position as we expand internationally.
You went public in 2020, which was a standout year for ABKO. Following that, the company experienced some stabilization due to COVID but has since resumed its growth trajectory. A significant boost to your financials has come from the education sector. How do you foresee your company's growth in terms of numbers moving forward? You mentioned that the first phase of digitalization in education, which spanned two years, positively impacted your business. How do you view the future growth of the education sector?
With the Korean government actively pursuing the digital textbook initiative, we’re securing increasing orders domestically. We believe that digital textbooks and digital education will be the standard within the next decade. Given the continual advancement of digital devices, this will likely create a cyclical demand, offering substantial growth opportunities for us. This year alone, we project that around 40-45% of our revenue will come from the education sector. Looking ahead, we expect digital education to outperform our gaming business, which is why we’re intensifying our sales activities in this field.
By the latter half of next year, we anticipate seeing the results of these efforts as we secure more orders alongside the sector's growth. As the only company in Korea with the technical expertise to provide PADBANK and charging stations, we’re optimistic about the next two to three years. Including exports, we expect the education sector to make up around 80% of our total revenue going forward.
The adoption of your products is closely tied to the broader digitalization of the education sector. For export, identifying countries that are prioritizing digital education is crucial. Could you share the key markets you've identified? You mentioned Southeast Asia—are there specific countries in Asia or internationally? What milestones do you need to reach to achieve your targets in these markets?
Regionally, we’re primarily focused on Europe, and in Southeast Asia, we’re actively consulting with Indonesia and Thailand. These countries and regions have prioritized digital education as part of their national agenda, with significant budget allocations supporting this initiative. While I can’t disclose all details, we’ve achieved domestic market dominance with around 70% market share and have built a strong track record through pilot tests and verification for our PADBANK. This track record is crucial to earning trust from major companies, including Samsung, which has integrated our features into its laptops, Chromebooks, and Galaxy Tabs.
In Korea, of the 300,000 classrooms, only 50% have adopted digital education. We’ve already supplied around 100,000 PADBANK units, further building our credibility. Our ability to provide reliable device control and management through our charging solutions is helping us gain confidence from large corporate partners, setting a strong foundation for expansion in international markets.
With the internationalization of PADBANK underway, where do you see your position in the global market? We've noticed that tariffs on Chinese products are impacting their price competitiveness. How does ABKO’s PADBANK position itself against Chinese products, particularly in markets like Europe?
We’ve completed an in-depth analysis of Chinese charging stations and found that most are designed solely for charging purposes. Currently, they lack certification for use in various countries due to safety concerns. What differentiates our PADBANK is the integration of advanced software with monitoring and control functions, essential for reliable use in educational settings. We’ve supplied 100,000 PADBANK to date, all managed through our proprietary software servers. In a digital education environment, this monitoring capability is crucial for efficient and safe operation. Without software control, it’s challenging to ensure a secure and productive setup for digital education. This functionality gives us a competitive advantage over Chinese products in the international market.
You mentioned that PADBANK and digital education will account for 80% of your revenue. Over what timeframe do you anticipate this growth?
In the next two years, we plan to supply PADBANK to cover an additional 50% of classrooms, following the completion of the current digital textbook initiative. In the second phase, we aim to provide another 50%, as the first 50% of PADBANK we supplied will begin reaching end-of-life, leading to replacement cycles approximately every six to seven years. This will help us further increase our market share in Korea, where we are already in 45% of classrooms.
In international markets, our PADBANK are currently undergoing pilot testing against competitors, including those from China, to assess our software and hardware capabilities. As this global expansion progresses, we anticipate a 20-30% revenue increase domestically and substantial growth abroad over the next few years. Within two to three years, we expect these efforts to bear fruit, aligning with the anticipated surge in demand in this industry.
Expanding internationally means engaging with various stakeholders, such as Ministries of Education and private institutions like secondary schools and kindergartens. If you were to summarize the unique value ABKO offers these institutions, how would you do so?
Even in Korea, digital education is still in a transitional phase. Although 50% of classrooms now use digital textbooks, the full integration of digital education is still developing. Initially, the demand for our PADBANK was low because there was a perception that charging stations were simply for charging. Many didn’t realize that effective digital education relies on well-equipped, secure, and manageable charging stations. Teachers encountered problems when preparing for classes—some Chinese products failed to charge reliably, some devices went missing, and others used unsafe, flammable materials.
Our experience supplying over 100,000 PADBANK to classrooms and offering other products to the market gave us an established reputation. This track record has helped highlight the importance of robust charging stations for digital education. We believe the true value of PADBANK lies in their advanced utility, which is why we are constantly innovating and investing in R&D to improve our technology and meet the evolving needs of digital education.
Looking ahead to your 30th anniversary in a couple of years, what achievements would you like ABKO to be able to celebrate?
Going public was a major milestone for us, driven by the success of our gaming gear, and we’ve always aspired to become a globally recognized brand like other industry leaders, who have become a household name in computer peripherals for Korean public institutions. Our goal is to build global brand recognition alongside technological excellence.
In digital education, we aim to make a meaningful contribution to early education worldwide by supplying state-of-the-art charging stations that support digital learning. We want to secure a prominent position in the global education sector and continually advance our technology to foster a strong international digital education environment. Additionally, we are entering the private education sector in our target regions, and we’ll keep refining our R&D and technology to support this mission.
For more details, explore their website at: https://abkoglobal.com/
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