December 8, 2002 9:00 PM PST

Gateway gets its tablet PC in Motion

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Direct PC seller Gateway plans on Monday to start selling its first tablet PC.

As previously reported, Gateway is co-branding with Motion Computing a tablet developed by the start-up company. The device, which runs Microsoft's Windows XP Tablet PC Edition operating system, weighs 3 pounds and has a 12-inch screen. It will carry both companies' logos.

By partnering with Motion, Gateway was able to have a tablet PC on shelves sooner than if it had developed the product itself, said Gateway senior product manager Chad McDonald.

"We came to the table probably a little late, and we determined we weren't going to do something on our own," McDonald said.

The Gateway tablet is powered by Intel's 866MHz mobile Pentium III processor and comes with 256MB of memory and a 40GB hard drive. Priced at a hefty $2,799, it includes built-in 802.11b wireless networking, a portable keyboard, a docking station and external combo drive that can play DVD movies and burn CDs.

Although Gateway has opted for a pricier option than some of its rivals, McDonald said that the company felt it was important to include features such as a keyboard and CD-RW drive so that the tablet's first customers wouldn't feel they had to buy more to make the package complete.

Like Motion does, Gateway is aiming the high-end tablet PC at business customers, particularly those in industries such as education, health care and manufacturing. However, Motion executives say selling the tablet PC through Gateway could broaden the device's appeal.

"Teaming with Gateway is an ideal way to extend the tablet PC beyond the vertical markets targeted by Motion Computing," Ralph Spagnola, a vice president at Motion, said in a statement. "Gateway has cultivated a very large base of general business users that can benefit from the ultramobility, power and versatility of a clipboard-size tablet PC."

However, analysts have questioned how large the initial U.S. market will be for the new crop of tablet PCs. IDC has projected that roughly 500,000 to 750,000 machines running the new Microsoft Tablet PC OS will ship next year, a small fraction of the 13 million notebooks that are expected to be sold in the United States next year.

McDonald said that Gateway should be able to tap business customers as well as those consumers who want the latest and greatest gadget. He added that the company has an advantage over rivals in that it can tap its nationwide network of retail stores.

"It's definitely a product that to understand it, you have to touch it and feel it," McDonald said. "Obviously, there the (Gateway) Country stores are a big advantage."

McDonald said the direct PC seller plans to have display models in each of its roughly 270 Gateway Country outlets.

Gateway joins Toshiba, HP, Acer and others in launching portable computers running Microsoft's new Windows XP Tablet PC Edition operating system. Some, like Gateway, are creating flat models that resemble an Etch A Sketch toy. Others, such as Acer, are more like traditional notebook computers, but have a screen that can rotate and fold over on top of the keyboard when used as a tablet.

 

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