Gateway aims at homes for the holidays

The company throws open the doors on its renovated retail stores and launches an array of digital gadgets and home electronics.

John G. Spooner Staff Writer, CNET News.com
John Spooner
covers the PC market, chips and automotive technology.
John G. Spooner
4 min read
Gateway on Tuesday kicked off the holiday season a little early, throwing open the doors on its renovated retail stores and launching an array of new PCs, music players and digital cameras.

As previously reported, the Poway, Calif., PC maker has refurbished all 190 of its retail outlets to try to establish itself as a brand name in the consumer electronics market and return to profitability.

Gateway CEO Ted Waitt said at an event at the company's Union Square store in Manhattan, N.Y., that the company has done a lot of work behind the scenes to reorganize itself and bring out a host of new products.

"We've made a tremendous amount of progress really transforming Gateway," he said. "Now we're going to show you everything we've done...from the eyes of the customer. We truly are a new Gateway."

The store renovations are the latest phase of the PC maker's consumer electronics plan. The company has launched nearly 100 new products, including those introduced Tuesday. The coming holiday season will be the first real test of how well the company can sell its consumer electronics portfolio.

The renovated stores feature a new living-room motif and multiple stations that show off Gateway's home electronics gear and other products. For instance, stations give customers a hands-on display of Gateway DVD players, music players or digital cameras and detail how the devices can interact with PCs, home theater gear and flat-screen televisions.

There are also stations for business products such as servers and storage systems. The company previewed several new business storage offerings at the Manhattan event, including a new disk array and a storage area network product that it will offer with a major partner.

Gateway hopes that because the stations show how each product works with other devices, holiday shoppers will leave its stores with more than they came in for.

Gadgets galore
Among the new products introduced at the event, the company showed off several notebooks, including the Gateway M275 convertible tablet PC, which has a starting price of $1,799. That laptop has a 14-inch display, wireless networking and a 1.4GHz Intel Pentium M processor. The screen rotates and folds flat, so that it can be used as a writing tablet.

The Gateway M675 notebook features a 17.1-inch screen and a 3GHz Pentium 4 processor for $1,999, and the Gateway M505, which comes with a 15.4-inch screen, a 1.4GHz Pentium M processor, and a built-in subwoofer speaker, costs $1,599.

The company also debuted two new digital cameras--the $249 Gateway DC-M42 and the pocket-size Gateway DC-T23 for $129--as well as four product bundles for digital photography, music, movie editing and home networking. The bundles range in price from $849 to $1,599. The company's "Everything Connects In My Home" bundle includes a Gateway 510S Media Center PC, wireless networking gear and an all-in-one printer. The bundle sells for $1,599.

Waitt touted the company's hard-drive-based DMP-X20 MP3 player, which has a 2.5-inch display and will come with 20GB of storage for $299, he said. The MP3 player may be of particular interest to audiophiles. Aside from playing songs, the device includes an FM tuner and a voice recorder.

The company also added 23-inch and 26-inch LCD (liquid-crystal display) televisions to its digital TV line and a Media Center PC model designed for the living room. Dubbed Gateway 901 Family Room Media Center PC, it fits into a rack with stereo equipment but is otherwise the same as a standard media center PC. The starting price is less than $1,000, Waitt said.

Finally, Gateway added a $49 home network that uses a home's power lines to connect its devices.

While Gateway's transformation has been relatively quick, it hasn't been an easy process. The company has extensively reorganized itself, outsourced many of its operations, cut about 3,200 jobs, and has closed 82 stores since January.

Despite the redesigned stores and the avalanche of new products, Gateway will face stiff competition from retailers such as Best Buy, consumer electronics giants such as Sony and Samsung, and other PC makers including Dell. However, the New York event could help Gateway get the word out before next week's Comdex trade show.

"Gateway's latest product launch is intended to further cement its 'transformation' into a branded integrator," Tim Deal, an analyst with Technology Business Research, wrote in an e-mail to CNET News.com. "With the introduction of new cameras, a 20GB MP3 player, a tablet PC and bundled solutions, the company hopes to boost lagging sales as well as reap high-margin benefits from consumer electronics products, in time for the holiday season."