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$399 PC fills out Gateway's holiday lineup

With many analysts predicting that the holiday season may be weak for PCs, Gateway is aiming to loosen consumers' purse strings with a $399 PC.

Amid fears that consumers won't be shelling out for high-ticket items this holiday season, PC makers are lowering prices to try and loosen consumers' purse strings.

Gateway on Friday became the latest PC maker to offer a $399 PC, selling its 300S model for that price--sans monitor--after a $100 rebate. Gateway joins Hewlett-Packard and eMachines, which also offer $399 PCs.

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Gateway plans to tout the desktop as part of a new ad campaign that starts Friday, built around the new "A better way" theme and highlighting Gateway's push into digital electronics. Gateway's ad will also feature the 42-inch plasma screen TV that will be formally announced Monday. As earlier reported, the model will sell for just under $3,000, which analysts say will make it the lowest-priced plasma-based television on the market.

Gateway Senior Vice President Brad Shaw said his company is aiming to convince customers that it has the best value, whether that's a $399 PC or a $3,000 television.

"When you look out, there are still people in the market shopping and buying," Shaw said. "There is plenty of opportunity to continue selling. We are just saying let's get out there early and take the lion's share of the attention."

With many analysts predicting that the holiday season may be weak for PCs, Gateway also wants to show consumers that there are other reasons to check out its stores, such as to buy digital music players or video cameras.

The $399 Gateway PC comes with a 1.8GHz Intel Celeron processor, a 40GB hard drive, 128MB of memory, a CD burner, and a year's worth of America Online Internet service.

Separately, Gateway also said it will offer free training classes to teachers. Teachers and administrators in the United States can sign up now through the end of the year for the classes, which will take place at all of Gateway's U.S. stores.

Gateway is following in the footsteps of Apple Computer, which last month said it would offer free copies of Mac OS X to teachers.