August 26, 2002 10:20 AM PDT

Gateway ads assault the iMac

Gateway has a message for Apple Computer's iMac: Step aside.

As first reported by CNET News.com, Gateway on Monday unleashed an aggressive ad campaign that directly targets the iMac and released six new Profile 4 PCs that closely match the pricing and configuration of Apple's trendy all-in-one PC.

Gateway's assault on iMac comes two days after Apple released a major upgrade to Mac OS X and amplified its "switchers" marketing campaign aimed at wooing PC users to the Mac.

But Gateway has an ad campaign of its own, which will pit Profile 4 against iMac in head-to-head comparisons--a rarity in the computer industry. Both companies target their all-in-one computers to consumers and use their own company stores to either promote or sell them.

The computers both incorporate liquid-crystal display (LCD) monitors, though the designs differ. The Profile 4 is built around the monitor, whereas the iMac suspends the display from a swinging arm attached to a half-dome base. Apple unveiled the flat-panel iMac in January and upgraded one model to a 17-inch monitor in July.

Gateway's iMac ad counterpunch will bear little resemblance to Apple's switchers campaign, which features former PC users raking over Windows computers as being too hard to use. In one Apple ad, Mac convert and writer Sarah Whistler describes her PC as a "horrid little machine."

Gateway's ads will focus on Profile 4's features and performance as compared with the flat-panel iMac. The spots will tout Profile 4 strengths, such as great memory and bundled software extras, over the flat-panel iMac. The ads will end: "Did we mention the Gateway Profile 4 costs less than the iMac?" Gateway estimates that 83 percent of U.S. adults would see the TV ads an average 14 times through September.

Gateway's TV ad parodies earlier iMac ads and two short Pixar trailers. The Pixar trailers have featured an iMac jumping around the screen, something the Profile 4 does in the new Gateway ads. As a narrator touts Profile 4's advantage over Apple's computer, Gateway's all-in-one PC does flips and backflips over three iMacs.

In an earlier iMac commercial, Apple's computer on display in a store window follows the movements and gestures of an onlooker. When he sticks out his tongue at the computer, the iMac mimics him by sticking out its DVD drive drawer. Gateway uses this to again poke fun at iMac. During Gateway's ad, just as the narrator touts the PC's better pricing over the Mac, the Profile 4 spits out its drive drawer at the iMac in mocking fashion.

The Poway, Calif.-based PC maker also plans a series of magazine ads that pit the two computers against one other, capped with the headline: "It's a close contest. Until you turn them on."

Not since 1984
Gateway designed its advertising campaign to take advantage of the hype Apple has created around all-in-one PCs featuring flat-panel monitors.


Reader Resources
Gateway Profile 4 review
CNET Reviews details pros and
cons with Gateway's new PC line.


"If you look at iMac's market share, it's relatively small," said Gateway spokesman Brad Williams. "But iMac's mind share is quite big. By capitalizing on that mind share, we can leap ahead of Apple. The visibility of iMac is much bigger than the number of PC switchers."

But NPDTechworld analyst Stephen Baker believes Gateway may be making a mistake.

"I'm not sure how going after Apple helps Gateway," Baker said. "Given where Apple is in the market share wars these days, it doesn't seem like there's been a big sea change from PCs to iMac, or to Apple for that matter. So Gateway is going after people who have not been swayed to buy an iMac yet. They're not ready to be switchers, and they may not be ready to buy the new Profile either."

In developing the ad campaign, Gateway also is trying to give a little payback to Apple for its years of assault on the PC, starting with the famous Ridley Scott-directed TV ad that portrayed the PC world as Big Brother.

"Since 1984, Apple has had at least four or five ad campaigns that targeted PCs," Williams said. "To our knowledge, this is the first time a PC maker has gone after Apple."

While that isn't a bad idea, "Gateway would have been better off doing its own ads promoting the Profile 4," Baker said. "Typically when you do a comparison kind of ad, you're doing that to try and steal sales from a successful product. It doesn't make a lot of sense to go after iMac's small market share."

Still, Gateway has some strong advantages over Apple in the struggle for customers--the main one, of course, being the dominance of Windows. Apple must get PC users to switch from Windows computers to the iMac, whereas Gateway can appeal to those interested in a trendy all-in-one computer without the added cost and other hassles associated with moving to a new operating system.

Gateway has also priced the Profile 4 competitively against the three major flat-panel iMac models, undercutting the low-end iMac by $300. Gateway offers four consumer Profile 4 computers and two business models. Apple offers four iMacs.

The high-end consumer all-in-one, the Profile 4XL, comes with a 2.66GHz Pentium 4 processor, a 17-inch flat-panel monitor, 512MB of double-data rate (DDR) SDRAM, a 120GB hard drive, a CD-RW/DVD combo drive, USB 2.0 and Windows XP Home. It's priced at $1,999. An upgrade to a 2.8GHz Pentium 4 processor is available for $150 more. Apple's high-end iMac, selling for the same price, comes with an 800MHz PowerPC G4 processor, a 17-inch wide-screen flat-panel display, 256MB of SDRAM, an 80GB hard drive, a DVD recording drive and Mac OS X 10.2.

At the midrange price of $1,499--the price analysts see as most important for the computers--Gateway offers three configurations versus Apple's one. The Profile 4X, for example, comes with a 2.4GHz Pentium 4 processor, a 17-inch flat-panel monitor, 256MB of DDR SDRAM, a 40GB hard drive, a CD-RW drive and Windows XP Home. The $1,499 model comes with a 700MHz PowerPC G4 processor, a 15-inch flat-panel monitor, 256MB of RAM, a 40GB hard drive, a CD-RW/DVD combo drive and Mac OS X.

Still, none of Gateway's Profile 4s offer DVD recording drives, a technology that's been a successful selling point for Apple. The Mac maker estimates about 50 percent of iMac customers buy one of the two DVD recording models.

But Baker said that's not a big hurdle for Gateway.

"Certainly that's an advantage for Apple, but we're still at the infancy of PC recording in the market right now," Baker said. "It would be unlikely that Gateway would be losing any sales to Apple by not having the DVD recording. It's a nice technology to have, but that's all for right now."

 

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