April 22, 2002 8:55 AM PDT
New Gateway PCs: Pretty in platinum?
The PC maker on Monday launched three new notebooks and a desktop with a new, curvy metallic look. The new machines are largely platinum in color, reminiscent of Apple's silvery Titanium PowerBook, but also use graphite black accents.
The redesign is meant to reflect the new computers' performance, ergonomics and style. But in keeping with Gateway's overall effort to revive its PC business, which was hit hard during 2001, the machines don't cost a mint.
The company is hoping to narrow recent losses by cutting expenses at the same time that it is selling PCs at lower prices to keep pace in the market-share sweepstakes. Gateway's earnings met expectations for the first quarter, and the company said that its losses would narrow in the current quarter, even as it grapples with the likes of Dell Computer. As in earlier quarters, Dell was the only PC maker to increase in its worldwide market share during first three months of 2002.
For some PC makers such as Dell, prices of new PCs have been creeping upward. However, Gateway, which went on a price-cutting spree earlier in the year, is holding prices fairly steady while offering machines fitted with faster processors and maintaining larger allotments of memory. As a result, its machines are often less expensive than those of competitors, though at the expense of its own profitability.
A Gateway representative said the company's goal is to "stick to aggressive pricing," despite component cost increases seen in areas such as RAM and LCD screens for notebooks and flat-panel displays.
Gateway's three new notebooks combine a more attractive design with better ergonomics and some nifty features, the company says, to take on Dell and other competitors. Meanwhile, it will get some help from Intel, which is expected to launch lower-priced mobile Pentium 4-M processors at an event in New York on Tuesday.
Though it held prices, one thing Gateway did change was the name of its notebooks. The PC maker dropped its longtime Solo notebook name in favor of model numbers.
The Gateway 600, the company's new flagship notebook, includes a feature that will let owners listen to MP3 and other audio files on headphones without turning on the machine; listeners control the playback through external buttons. The notebook, which starts at $1,799, will offer a 15-inch screen, a 1.6GHz Pentium 4-M processor, 256MB of memory and a 20GB hard drive. It will also offer an optional 15.7-inch screen, faster processors, larger hard drives and integrated wireless capabilities.
Meanwhile, the PC maker will offer the lower-cost, lighter-weight Gateway 450. The 5.5-pound machine sports a Pentium 4-M chip, a 14.1-inch screen, 256MB of RAM and a 20GB hard drive for a starting price of $1,499.
The company also unveiled a new ultraportable machine, the Gateway 200. As expected, the notebook weighs 3 pounds and offers a 12.1-inch screen, 933MHz Pentium III-M processor and integrated wireless capabilities, for a starting price of $1,999. But Gateway also includes a multimedia dock, which has a floppy drive, ports for connecting peripherals, and a drive bay for CD-RW or DVD drives.
The machine costs about $100 more than Gateway's current lightweight, the Solo 3450, but it offers a faster processor and integrated wireless capabilities. Otherwise, Gateway has held the line on pricing, where many of its competitors such as Compaq Computer and Hewlett-Packard have increased prices with new spring models.
The new models come at a critical time for Gateway, which slipped even as Dell grabbed a large chunk of the U.S. market in the first quarter, IBM grew slightly and HP saw flat sales. Gateway saw shipments shrink nearly 30 percent year over year for the first quarter of 2002. Units shipped declined from 923,000 in the first quarter of 2001 to 650,000 units sold during the first quarter of 2002, according to market researcher IDC.
Gateway will also benefit from a renewed push by Intel to lower the price of Pentium 4 notebooks and make the Pentium 4-M chip the de facto processor for anything above about 4.5 pounds. Intel on Tuesday is expected to announce 1.4GHz and 1.5GHz Pentium 4-M chips for lower-priced notebooks, along with a faster 1.8GHz chip for high-end machines. The chipmaker is also likely to discuss its plans to push ahead to 2GHz before the end of the year.
Meanwhile, the new Gateway 500 desktop sports the new design and includes an updated chassis that is easier to service, according to the company. The entry-level 500SE offers a 1.6GHz Pentium 4 processor, 128MB of RAM, a 20GB hard drive and a CD-RW coupled with a 15-inch flat-panel display. The machine costs $999, holding the line on price. Meanwhile, a 500XL model will offer a 2.4GHz Pentium 4, 512MB of RAM, a 120GB hard drive, both CD-RW and DVD drives, and an 18-inch flat panel for $2,799.
Over time, all of Gateway's new computers will receive the platinum treatment.
But for right now, "we wanted to (offer) a new look across all of our new products...a distinctive look that's good in home and corporate settings," said Philip Osako, director of product marketing and planning for mobile systems at Gateway.