June 15, 2007 11:34 AM PDT

Gateway makes first foray into China

Gateway will finally start to sell PCs in China this summer while Dell will try to target upscale consumers in the country.

Gateway, which is still one of the largest PC makers in the U.S., will sell its PCs through Digital China, according to representatives from Digital China and Gateway. Digital China has formed a team to handle the Gateway deal and start selling the company's PCs in August.

International sales have always been a sore point for the Irvine, Calif.-based PC maker. Back in the go-go late 1990s, Gateway laid out plans to expand into several countries. The tech market imploded and Gateway retrenched. This will be Gateway's first foray into China, a Gateway spokesman said.

It won't be easy. China has its own PC brands, and most of the multinational vendors are already there. The country also boasts a large number of "white box" manufacturers and dealers specializing in bargain PCs. Although China remains one of the fastest-growing PC markets in the world, many local consumers are very cost-conscious.

Meanwhile, Dell is expected to launch fashion PCs in China later this summer, targeting the growing number of well-heeled shoppers in Shanghai and Beijing, according to sources quoted in the local media. Dell currently has two separate brands of high-end PCs. It makes Alienware PCs, mostly for gamers, and sells the XPS line under the Dell brand. The XPS line is already available in China.

China is a developing country, but in downtown Beijing brands like Burberry, Mercedes and Ritz Carlton are tough to miss. Dell spokespersons in the U.S., as of press time, did not return calls for comment.

Dell has historically been one of the more successful foreign PC makers in China, but the growth in sales has slumped with the overall slowdown at Dell. Dell could not be reached for comment.

Multinational PC makers often bundle in software with the sale of computers, which helps put a dent in piracy. Still, software piracy remains rampant and computer dealers sell various versions of Windows for a little more than $1.

Wang Dan of ZDNet China reported from Beijing. CNET News.com's Michael Kanellos contributed to this report.

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9 comments

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Gateway to sell in China
This is very amusing! Gateway computers are manufactured in China. I recently bought their tablet laptop and had to wait for it to be built in China and it was shipped from Shanghai.

Aren't all computers built in China and then packaged with names to suit the big companies who sell them?
Posted by ashaver (1 comment )
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more or less
this is just stupid. why would any chinese buy an "overpriced" pc FROM gateway when they can buy the same thing on the street corner preloaded with pirated software for a fraction of the cost?
Posted by DecliningUSDollar (56 comments )
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Dell Sales Slump
the dell sales slump is likely due to 10 chinese companies who bought dell computers, reverse engineered them so as to make knockoffs and began selling them as their own. most likely, this is why "dell could not be reached for comment" - because dell's butt is sore from getting screwed by the chinese.

american companies need to wake up.
Posted by DecliningUSDollar (56 comments )
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Why Dell?
Why would anyone in China want to buy a Dell knock-off computer? I can see knock-offs of Sony, Apple, and maybe even HP computers being sold in China. As for Dell, the hardware itself isn't much more competitive than whitebox computers.

Also, reverse engineering computers is too much trouble. It would be much cheaper just to pay off managers at contract manufacturers used by Sony, Apple, HP, and Dell to produce additional units. That way, no reverse engineering is needed and can benefit from the economy of scale from orders placed by by Sony, Apple, HP, and Dell.
Posted by shawnlin (75 comments )
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Wake up to what?
Where you've been? Foreign made goods has basically been the staple of consumer goods in the US for a long time now. Don't blame the Chinese (while you're at it why don't you also blame the Mexicans, Japanese, Koreans, Indians, etc.), the decision to outsource is a decision made by AMERICAN CORPORATIONS so that the CEOs and their cronies can line their pockets. Dell screwed themselves with inferior service and quality - they didn't need any help from the Chinese.
Posted by oxtail01 (308 comments )
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Dell's Xiamen, China Customer Service Sucks
If Dell wants to win more market share in China, they need to do a heavy duty shakeup of their Greater China customer service center in Xiamen, China. On a scale of 1 to 5, for customer service were 1 is the lowest level and 5 is the highest level, I would rate the Dell's customer for the US which was located in India a 4 (heard it was moved back to US due to quality issues), while I would rate the customer service for China that is located in Xiamen at 1.
Posted by shawnlin (75 comments )
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Service a 4/5?!?!
As a long-time owner of Dell computers, I can only sadly report that customer service has gotten worse over the years. But it isn't just Dell. HP's is pretty pathetic, too. Both companies -- and many others -- apparently outsource their support to the lowest bidder and it's very frustrating wasting time even talking to the support folks as they are generally clueless. I would not give Dell's US support (which is not US-based as of 3 weeks ago) a 1.
Posted by paulej (1261 comments )
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Dell's Senior Management for Dell Asia Pacific
Last year when I went to a Dell enteprise solutions seminar in Taipei, Taiwan, and each attendees had a chance to enter into a raffle/draw for a few Dell PDAs.

Just before the raffle/draw, one of the VPs from the Dell Asia Pacific organization, told the whole audience through the microphone that the Dell PDAs were running the English version of Windows Mobile because Dell does not sell a Traditional Chinese version of its PDA product line in Taiwan. But winners of the Dell PDAs can obtain information from designated Dell employees that were onsite of stores located in "back alleys" that can flash a Traditional Chinese version of Windows Mobile on the Dell PDA that was extracted from other PDAs. He also said that because the Dell PDAs are not sold in Taiwan, they cannot provide warrenty or support services for it in Taiwan.

I realize that these PDAs are gifts from Dell to the lucky winners that attending the seminar. But still, for a senior exective to openly suggest changing the Windows Mobile in the PDA to an unauthorized copy and giving out products from their own company that is not supported in a country were it is operating is just "shocking".

If Dell is serious about doing business in China or the Asia Pacific area, they need to be careful of who they hire for their senior management in the region.

The only competitive edge that Dell can have over its rivels in Asia is its customer/product service quality. It needs to serve Asian customers with the same level of service quality enjoyed by Dell's customers in the US. Otherwise, they might as will pack up their bags and go home.

Good place to start making changes to offer better customer service would be to do some serious re-organization of their senior management team in Asia. If senior management doesn't have the right attitudes when dealing with customers, then why would their employees value their customers?
Posted by shawnlin (75 comments )
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