July 21, 2005 10:58 AM PDT

Gateway turns off the TV

PC maker Gateway no longer fancies itself a TV star.

The computer maker confirmed Thursday that it is exiting the business that it entered with much fanfare in late 2002. At the time, Gateway snagged plenty of headlines and attention from rivals when it started selling a plasma TV for $3,000--thousands less than many competitors were charging. The company later added LCD models.

More recently, however, the company has been retreating from its foray into the consumer-electronics market and focusing its attention on the core PC business.

The company's merger with eMachines and decision to close its chain of Gateway Country stores had a lot to do with the decision to get out of the television business, said IDC analyst Richard Shim.

"They said that a lot of their success with the TVs came from the fact that people could go into the Gateway stores and touch and feel them," Shim said. Even if customers eventually ordered them online, being able to check out the TVs in person was critical to the bulk of sales, he said.

A Gateway representative said the TVs and other consumer-electronics gear did not fit in as well with Gateway's new business.

"We had a captive audience with our Gateway-owned stores, and that was central to our CE (consumer-electronics) strategy," said spokeswoman Lisa Emard.

Profit margins have also dropped significantly since Gateway started selling TVs nearly three years ago.

Even as Gateway exits that business, the PC makers that followed its lead remain. Dell has a significant TV business and Hewlett-Packard also has a relatively new lineup of models.

Dell is doing pretty well in televisions, Shim said. The narrower profit margins work with Dell's low-cost strategy. Plus, Shim said, "Their PC market is doing fine, so they are looking for more growth."

8 comments

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Hopefully they can revive
Back in the day that Packard Bell still produced shoddy machines, I considered Gateway to be the best around. Then Dell came, and they quickly stole Gateway's thunder.

I think they are better off with going back to their roots and thinking small. I think Dell and HP will later learn that the TVs (and most other CE they sell) isn't that profitable for them, and they will cut them as well.

I still like Gateway, but they need to get back to their roots and start selling quality and service again.
Posted by (20 comments )
Reply Link Flag
Hopefully they can revive
Back in the day that Packard Bell still produced shoddy machines, I considered Gateway to be the best around. Then Dell came, and they quickly stole Gateway's thunder.

I think they are better off with going back to their roots and thinking small. I think Dell and HP will later learn that the TVs (and most other CE they sell) isn't that profitable for them, and they will cut them as well.

I still like Gateway, but they need to get back to their roots and start selling quality and service again.
Posted by (20 comments )
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Hopefully they'll go out of business
Gateway is the lowest of the low. If you are in need of a shoddy
underpowered pc that never works properly, Gateway should be
your cup of tea. Companies that produce garbage and don't
provide tech support for said garbage should be put out of
business immediately, instead of wasting everyone's time with the
slow-death approach that this joke of a company insists on taking.
Do gateway a favor and don't buy their products!
Posted by montgomeryburns (109 comments )
Reply Link Flag
That would be Dell.
Posted by JARIZONE (2 comments )
Link Flag
Hopefully they'll go out of business
Gateway is the lowest of the low. If you are in need of a shoddy
underpowered pc that never works properly, Gateway should be
your cup of tea. Companies that produce garbage and don't
provide tech support for said garbage should be put out of
business immediately, instead of wasting everyone's time with the
slow-death approach that this joke of a company insists on taking.
Do gateway a favor and don't buy their products!
Posted by montgomeryburns (109 comments )
Reply Link Flag
No More Cheap Plasma TVs
I wonder how those customers who buy Gateway TV get their tech support in the future :)
Posted by 201293546946733175101343322673 (722 comments )
Reply Link Flag
Good question I just bought one and I still have tech support :)
Posted by JARIZONE (2 comments )
Link Flag
No More Cheap Plasma TVs
I wonder how those customers who buy Gateway TV get their tech support in the future :)
Posted by 201293546946733175101343322673 (722 comments )
Reply Link Flag
 

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