Gateway to Abandon Consumer Electronics

[James Fee]

<div class='os_post_top_link'><a href='http://www.fool.com/news/mft/2004/mft04091313.htm?logvisit=y&source=estmarhln001999&npu=y&bounce=y&bounce2=y' target='_blank'>http://www.fool.com/news/mft/2004/mft04091313.htm?logvisit=y&source=estmarhln001999&npu=y&bounce=y&bounce2=y</a><br /><br /></div>"<i>Gateway's newest gamble will be to ditch consumer electronics and focus on its original offering, PCs, according to The Wall Street Journal. This represents yet another shift in direction for the company, seeing how it recently shuttered its retail stores, getting together with retailers such as Best Buy and CompUSA. Is this a great idea or a possible misstep? There are a lot of angles that lend themselves to arguing either side. Companies that focus generally stand a good chance at success. In this commentary from April, Tom Gardner explored the idea that focus is often key to good business (and good stock selections). He reminded us of an Italian proverb that many of us could use in all aspects of life: "Often he who does too much does too little."</i><br /><br />OK, how many of these "refocus" articles on Gateway do we see? I'm getting out my fork and am going to stick it into Gateway. I can't see how they can compete against Dell in any market. :? Of course this is perfect timing, since PC sales have cooled over the past year, for bankruptcy.

[Zack Mahdavi]

I remember reading an article 3 years ago when Gateway announced it would get into the Consumer Electronics business. They were supposed to revolutionize the CE industry, and as a result, turn themselves around. Some were speculating Gateway would drop computers completely in the near future... funny how that didn't happen. :roll:

It's a pity though... Gateway made some really nice plasma screens that forced the industry to lower prices.

[The Yaz]

It's a shame because I remember in the 90's that Gateway was a breath of fresh air when dealing with a computer company. I've worked in the non-profit industry for 12+ years, and I enjoyed the fact that the Gateway reps allowed you to haggle over the pricing.

Their downfall is that they can't differentiate themselves from the rest of the market. Dell does what they've done better. IBM/HP have the edge in corporate sales. Sony/Apple have the chic market. Where does Gateway fit in?

It doesn't.

Steve 8)

[Felix Torres]

It's a pity though... Gateway made some really nice plasma screens that forced the industry to lower prices.

To be precise, Sampo made some nice Plasma displays that Gateway re-branded. ;-)

I don't think Gateway is going away, given that what they currently are is just eMachine's sort-of upscale brand.
Getting out of CE just reinforces this.
All that remains is the name equity.

This isn't new, of course; RCA and GE are two old examples.
Atari is another.
Polaroid and Westinghouse are headed that way.

Old brands never die; they just become fronts for China, Inc... ;-)