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Gateway PDA held back for testing

Gateway has moved the introduction of its first handheld to mid-August. It was originally meant to go on sale as early as mid-July.

Gateway has pushed back the launch of its first handheld device, saying it needs more time to prepare it.

The Poway, Calif., company previously said it planned to begin selling the handheld, which uses Microsoft's Pocket PC 2003 software, sometime between mid-July and the end of the month. Now, it expects the launch to come closer to mid-August, a company representative said.

The company chose to move back the release date to ensure a smooth start for the new handheld, the representative said.

The handheld, the first PDA to be sold under Gateway's brand name, is an important product for the company, since it targets both consumers and businesses. Gateway has already taken a number of preorders from some its computer customers, the representative said.

"We're doing some more testing," he said. Gateway is also "making sure we have all of the accessories (such as keyboards and cases for the handheld) we want to have available for sale at the time of launch."

The new handheld is one of the more high-profile elements of Gateway's plan to return to profitability by establishing itself as a brand name in consumer electronics.

Getting those products out on time will be important for Gateway to meet its plan and hit various sales cycles, analysts said.

"If you're looking to hit the back-to-school season, releasing (a new product) in the middle of August is not as productive as releasing it in the middle of July," said Steve Baker, an analyst with NPD Group. "If you're looking longer term, a month probably doesn't mean a lot. When launching into a new category, you're better off getting it right the first time, rather than rushing a product to market."

Gateway, which reports second-quarter earnings on Thursday, has said it will launch 50 new products in 15 categories by the end of the year. The company has also said it plans to have products in place for a major sales push this holiday season.

Gateway has already begun the product blitz. Over the past few weeks, it started selling its Connected DVD player, new home theater gear and an expanded line of LCD televisions and plasma televisions.

The plasma TVs, as one example, are priced below many competitors' products, a move Gateway aims to use to take market share while still increasing its own profits.

Gateway is planning a similar strategy with its handheld. PDA sales have been slow, showing a 10.7 percent year-over-year decrease in the second quarter, according to a new report from IDC. But some new entrants, such as Dell and Toshiba, have been able to carve out a piece of the market.

Gateway's handheld will come fitted with a 400MHz XScale processor from Intel, along with a 3.5-inch screen and dual Compact Flash and Secure Digital slots. The slots will allow Gateway handheld owners to add modules for tasks such as connecting to a wireless network or storing data, Gateway said.

The device is expected to sell for about $300 to $350, placing it in the middle range of the PDA market.