Gateway to Enter Camera Market

Like PC competitors Hewlett-Packard Co. and Dell Inc., Gateway Inc. is busy planning the next major phase in its diversification strategy: more than a dozen new consumer lines, including its own digital cameras.

Gateway currently plans to deliver three still-image cameras, with resolutions up to 5.25 megapixels, according to sources.

Gateway spokesman Brad Williams confirmed that the company plans to enter the digital still camera market later this year, but declined to comment on when the products would be officially launched as well as their pricing.

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The extension into digital cameras is just part of the diversification strategy the company is now pursuing, prompted by cutthroat competition within the PC market. Analysts now call Gateway a branded integrator, rather than a traditional OEM.

HP, of Palo Alto, Calif., on Monday rolled out 158 new consumer products, ranging from printers to digital cameras to computers, in what Chairman and CEO Carly Fiorina called the largest product launch in company history.

Gateway, of Poway, Calif., has committed to launching 50 new products in approximately 15 new consumer lines by the end of the year, a Gateway spokesman said. The majority of the new wares will roll out by Thanksgiving, in time for the holiday season.

"Were looking to make Gateway the store for digital photography, both with highly trained people and redesigned stores," Williams said. "Were currently redesigning our stores right now for the holiday selling season.

"One of the outcomes is that were presenting ourselves as a new and different destination for digital photography," he added. "Were going to really appeal to those families who want to get into digital photography and need help."

According to Gateway, three cameras will be released: the 4.1-megapixel DC-M40, the 2.1-megapixel DC-T20, and the 5.25-megapixel DC-T50. In terms of resolution, the DC-T50 will be slightly more powerful than the HP PhotoSmart 945, released as part of HPs massive consumer launch. However, the Gateway spokesman cautioned that the companys plans could change before launch.

Gateways entrance into the digital-camera market could make a serious dent, judging from the companys other recent efforts to diversify. Two months after its launch, Gateways 42-inch flat-panel television is the highest-selling model in its category, according to Gateway, using data supplied by retail analyst NPD Intelect.

Currently, Gateway sells a number of digital cameras from several manufacturers on its Web site—including two cameras from rival Hewlett-Packard. Williams declined to specify whether Gateway will continue to sell HP cameras.

Next page: Can Gateway compete?