November 20, 2001 7:00 AM PST

Gateway bundles goodies for consumers

Gateway is launching a deal that lets consumers go from zero to geek for just under $100 a month.

The deal, which takes a cue from the auto industry, offers a laptop PC, a Pentium 4 desktop with flat-screen monitor, wireless network with installation, MP3 player and other goodies for $99 a month as part of a four-year deal.

Gateway has long aimed to get people to buy technology for a monthly fee, a plan first envisioned years ago with its YourWare financing program.

IDC analyst Roger Kay said the company is trying to play to its strengths, bundling a ton of service, software and hardware add-ons along with its PCs.

"That's a pretty good deal," said Kay. "They have a lot of stuff piled into that."

In looking to reverse a declining market share, Gateway has been trying to focus less on the cost of a basic PC and more on the high-end of the market. For example, a current promotion prices systems with a flat-screen monitor rather than the traditional, television setlike CRT display.

Since founder Ted Waitt returned as CEO in January, Gateway has slashed its work force and exited overseas markets as it tries to remake itself as an information technology service provider for the masses rather than just a PC maker.

The new bundle, dubbed the preferred family package, includes these goodies:

 A Gateway 500S Desktop PC with a 1.5GHz Pentium 4 processor, 256MB of memory, a 20GB hard drive, a rewritable CD drive and a 15-inch flat-screen monitor.

 A Solo 1200XL notebook with 12.1-inch XGA resolution, active matrix screen, 850MHz mobile Intel Celeron chip, 192MB of memory, a 10GB hard drive, CD-ROM drive and built-in wireless and wired Ethernet networking.

 An MP3 player.

 An Epson Stylus C60 inkjet printer.

 A Visioneer scanner.

 A Fuji FinePix digital camera.

 A wireless access point and installation of both PCs and the wireless network.

In offering so much, Gateway is clearly aiming for the high end of the market. However, by including two PCs, the deal seems most appealing to those without a PC or those whose computer needs to be replaced.

"It starts the dialogue about what's possible," said Mike Flanary, vice president of Gateway's communications solutions business.

Knowing many people already have a PC worth keeping, Gateway plans to be flexible. The PC maker will offer twists on the deal, such as incorporating an existing computer, provided it meets certain requirements such as running Windows 98 or later versions of Microsoft's operating system.

While the company figures that its new service of setting up PCs at customers' homes will appeal mainly to computing newbies, Flanary said even many experienced PC users want help setting up a home network.

 

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