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Gateway takes a shot at digital cameras

The company launches four Gateway-branded digital cameras, its latest effort to establish itself as a household name in consumer electronics.

Picture this: Gateway is aiming to capture more sales from consumers with four new digital cameras.

The cameras, which went on sale Thursday, are the company's first Gateway-branded digital cameras. They are aimed at advancing the Poway, Calif., company's goal of becoming a consumer-electronics heavyweight.

Three of the four cameras, which range from the 2-megapixel DC-T20 to the 5-megapixel DC-T50, will offer optical zoom lenses. A megapixel is a measure of the photo resolution a digital camera can deliver. The higher the number, the better the resolution.

Gateway designed the cameras, which range in price from $129 to $399, to woo both first-time and experienced buyers by offering the same or better features at a lower prices, said Matt Milne, general manager of Gateway's digital solutions group.

Ultimately, Gateway hopes to use its consumer-electronics products--which so far also include a new line of digital televisions, a portable music player, a game PC and a connected DVD player--to build several strong sources of income. Revenue and profits derived from consumer electronics, it hopes, will augment its PC and systems and networking businesses, bringing the company back to profitability after a string of losses.

Gateway said that its direct-sales business model--derived from the PC market--allows it to offer lower prices than traditional consumer-electronics makers and retailers while maintaining a healthy profit margin.

"We believe that the direct model has merits in a lot of consumer electronic categories," Milne said. "As a result, we're able to offer consumers price points that are significantly below market pricing."

Gateway tailored its least-expensive new digital camera, the $129, 2-megapixel DC-T20, for first-time buyers. The 3.9-ounce camera also includes a 1.5-inch display for viewing photos, a flash, and 8MB of internal memory to store its photos and short video clips. It has a slot for a memory card as well.

The company will aim for more experienced camera buyers with its Gateway DC-M40 and Gateway DC-M50, a pair of larger cameras that deliver 4-megapixel and 5-megapixel resolutions and offer 3x optical zoom lenses at prices of $199 and $299, respectively.

The Gateway DC-T50 will be the company's flagship camera, offering 5-megapixel resolution for $399. It is also based around a 3x optical zoom lens and ships with a 32MB Secure Digital format memory card and rechargeable batteries.

Gateway's prices are as much as 20 percent to 40 percent lower than competitors' for models with similar features, Milne said.

"A 4-megapixel camera with optical zoom at $200 is unheard of, right now. That's a real strong point," said Chris Chute, an analyst with IDC.

Gateway may still find tough challenges from established brand names, such as Sony. But a brand name doesn't always sell a camera, Chute said.

"Brand is kind of secondary to the look and feel of the camera and the price," he said. "It's often price and features for the masses, not so much brand."

For customers who insist on a different brand name, Gateway will continue offering cameras from the likes of Canon, Kodak, Minolta, Nikon and even Hewlett-Packard via its Web site and chain of stores.