Gateway Touts PC Bang for the Buck

Under its new leadership, Gateway will promote more fully-configured-and yes more expensive-desktops and notebooks to customers to revive its direct-sales business.

Gateway intends to return to its roots as an up-market direct-seller of PCs.

The Irvine, Calif., PC maker, whose CEO, Wayne Inouye resigned on February 9, continues to sell PCs via retail and direct to businesses and consumers.

However, on June 29 it announced a simplified direct-to-consumer product line, including fewer, more richly configured desktop and notebook models starting at $799 and $999, respectively.

The new product line signals the beginning of a three-phase plan under which Gateways top management, now lead by interim CEO Rick Synder, intends to bolster the companys direct-sales business while continuing to move ahead with its retail strategy, where it sells PCs under the eMachines and Gateway brands.

Once the main source of its revenue, direct sales have withered in recent times as Gateway pursued relationships with retailers.

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"Were going back to the basics," said Bart Brown, Gateways newly-appointed senior vice president for direct sales. "In the recent past, we had been trying to figure out the price game with Dell and [Hewlett-Packard] and retail. Thats not a game Gateway can win. We dont want to sell Celeron [desktops] without a monitor for $300."

Brown said that Gateway plans to return to catering to PC enthusiasts by offering aggressively priced PCs fitted with dual-core processors, Microsofts Windows XP Media Center Edition operating system and Office Basic Edition 2003 software.

Its desktops also come standard with digital flat panel displays, while notebooks come with widescreen displays.

Following Inouyes departure, Gateway executives admitted a direct-sales deficiency and signaled plans to bolster direct by beefing up its business and consumer-oriented offerings there.

It has since appointed James Burdick as its senior vice president for professional products.

Starting on June 29, Gateway began offering desktops starting at $799, including flat panel monitors.

One model, its Gateway DX310, comes with an Intel Pentium D 805 processor, 512MB of RAM, a 160GB hard drive, a multi-format DVD-writer drive, speakers, a nine-in-one memory card reader and a one-year warranty for its $799 price.

Free upgrades add Pentium D 930 and a 17-inch monitor, the companys Web site shows.

Its notebooks now start at $999. One model, the Gateway NX260 includes an Intel Core Duo T2050 processor running at 1.6GHz, 1GB of RAM, an 80GB hard drive, along with a combination CD-RW/DVD-ROM drive, Wi-Fi wireless and a 14.1-inch widescreen display.

Its NX560 offers a larger 15.4-inch screen for the same starting price.

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