June 27, 2003 1:20 PM PDT

Gateway to tout DVD interaction

Gateway is preparing to launch a new "connected" DVD player as the opening salvo in a consumer electronics blitz that it hopes will help it swing back to profitability.

The Poway, Calif., company has crafted the new device to look and act like a regular DVD player, but it will also be able to access and play multimedia files stored on a PC.

Gateway plans to begin shipping the new player, dubbed the Gateway Connected DVD Player, on Wednesday. It will sell the device alongside a number of new consumer electronics products, including digital televisions and new home theater equipment as it moves toward establishing itself as a player in the consumer electronics market, a Gateway representative said.

Aside from accepting regular DVDs, the player will work with Ethernet or 802.11b wireless home networks to fetch MP3 files or digital photos from one or more PCs in a home. It also will allow people to find the files they want by displaying a graphical user interface on a television screen. They can navigate the interface using the DVD player's remote control.

The price for the DVD player, which Gateway claims is the first to offer the PC connection, is $249.

The company will also offer customers help in setting up a home network, which it suggests they use to handle the connection between the DVD player and a PC. Wireless home networks from the company start at about $60, while wired networks start at about $40, a company representative said.

"What I like about the product is that, as you look at what Gateway is trying to do in becoming a branded integrator, this piece brings two elements together. This connects the PC experience with the entertainment experience--the television," said Matt Milne, Gateway's general manager of digital solutions.

Gateway is hoping that the DVD player, its home theater equipment and other forthcoming consumer electronics products will catch on with consumers so that families will buy several of its products. Gateway also has plans for new plasma and LCD televisions, for example.

The numerous new products also offer Gateway the potential for higher profit margins and also healthy growth rates for unit sales, something it needs to augment income from PC sales and help it back toward profitability, company executives have said.

Gateway will still face tough competition in its consumer electronics push. A number of companies have been working to create their own new products that connect PCs and consumer electronics devices. But as Gateway sees it, there's not much that could be worse than the competition in the PC market right now. By diversifying, the company hopes it will increase its revenue across the board and rack up a hit product.

Gateway also plans to combine the Connected DVD Player with a sound system to create a home theater system that will start at less than $1,000. In addition, the company is set to launch a pair of new five-speaker home theater products that start at about $500 in July.

 

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