October 24, 2001 11:50 AM PDT
Gateway shelves Net-surfing device
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Computer maker Gateway has become the latest company to kill off its Web-surfing appliance, officially discontinuing the Connected Touch Pad that it developed with America Online. The unit, which was unveiled last November with a $599 price tag, has been on life support since March, when the company said it was putting its Internet appliance plans on hold.
The product had been written off as dead for months, according to analysts.
"Neither Gateway or AOL really pushed it," IDC analyst Bryan Ma said Wednesday. "It was more or less sitting on the back burner. When new management came in (earlier this year), it got pushed off."
In recent months, the Touch Pad became an increasingly less prominent part of Gateway's sales. The company stopped selling the Touch Pad altogether last month.
Web-surfing devices, which typically lack a hard drive, were designed to offer a simpler alternative to a first or additional PC. But sales of such appliances never took off. One factor that limited sales was the fact that many of the devices cost nearly as much as a low-end PC.
Gateway spokesman Greg Lund would not say how many of the devices were purchased but conceded that the Touch Pad was not a strong seller.
The Touch Pad had been part of Gateway's vision of a home filled with specialized gadgets linked together through a home network. Lund said the company is focusing on home networking as a way to link PCs instead--at least for the near future.
"We've learned a lot about what people want and what they don't want," Lund said.
Gateway has pulled back on a number of more far-flung designs as it looks to slim its product line amid a massive restructuring. The company's Destination computer/television hybrid for the living room is now available only for certain education markets. The company has also made several tries with its Profile all-in-one computer.
Gateway said it will continue to offer technical support for those who bought the Touch Pad but will not offer refunds. By contrast, Sony gave buyers a full refund for its short-lived eVilla, as did 3Com with its Audrey.
There are still a few Net gadgets on the market.
Compaq Computer continues to market the iPaq MSN Companion, a $300 device that connects directly to Microsoft's MSN Internet service, according to a Microsoft representative. The New Internet Computer Co., a Larry Ellison-backed start-up, also sells a $200 Linux-based device.