Gateway plans to overhaul its consumer PC line-up and
sell configurable models exclusively through its website and call
centres.
The company has replaced the 700, 500 and 300 series PCs on its
website with 7200, 5200 and 3200 series PCs and greatly expanded
the number of configuration options, including processor, memory
and hard-drive size. Options on the older PCs were limited to a few
accessories such as monitors, printers and software.
After completing its acquisition of eMachines in March, the
combined company looks much more like eMachines than the old
Gateway. There have been numerous changes in the way the company
does business, such as the closure of the Gateway retail store
network and new partnerships with retailers.
New chief executive officer Wayne Inouye has instilled an
eMachines-like culture of cost reductions and product
simplification. Gateway has laid off thousands of workers, backed
away from its consumer electronics strategy and moved to
standardise its PCs on a limited number of designs to reduce
component costs.
Gateway spokeswoman Kelly Odle said the company was still
committed to direct sales. Direct sales allow PC suppliers to cut
prices or make bigger profits as distributors and retailers don't
take a cut of the sale. The direct sales strategy allowed Dell to
undercut its PC rivals while maintaining healthy margins, and
almost drove the old Gateway away from PCs in favour of more
profitable consumer electronics products.
The new Gateway uses e-Machine's value equation method to
determine which configurations to use as starting points for direct
sales. Under the old system, Gateway relied on trial and error.
The price of the new low-end Gateway 3200S PC reflects the
new-found discipline. It costs $499.99 (£275) with a 17in CRT
monitor and has a Celeron D 330 processor at 2.66GHz, 256Mbytes of
PC2700 DDR SDRAM, an 80Gbyte hard drive and a CD-ROM drive.
Dell's entry-level Dimension 2400 costs $469 with a 17in monitor
after a $50 rebate, but has a slower processor and a smaller hard
drive. HP's Compaq SR1000Z series PCs are the cheapest systems
available on its website, starting at $323.99 but without a
monitor. A 17in CRT display costs $99 on HP's website.
The new Gateway 3200 series features the low-end 3200S, the
mid-range 3250S and the high-end 3200XL PC. Each series uses the
same branding strategy to differentiate the PCs, but each PC can be
configured with different components or displays.
The Gateway 5200S comes with Intel's Pentium 4 520 processor at
2.8GHz, 512Mbytes of PC3200 DDR SDRAM, an 80Gbyte hard drive, a
17in CRT monitor, and a CD-RW/DVD-ROM drive for $849.99.
The Gateway 7200S comes with the Pentium 4 540 processor at
3.2GHz, 512Mbytes of PC3200 DDR SDRAM, a 160Gbyte hard drive, a
15in LCD and a DVD+/-RW drive for $1,249.99. The entire 7200 series
is based on the new BTX motherboard design promoted by Intel.
Tom Krazit writes for IDG News Service