The company, a direct seller of PCs, began on Monday to bundle flat-panel displays as a standard feature with several models. The move is designed to distinguish Gateway's computers from rival products and to avoid direct price comparisons with competitors such as Dell Computer.
"We feel it's a good differentiator for us," said Randy Farwell, director of product marketing for Gateway.
For $999, Gateway is offering its 300SP system with a 1GHz Intel Celeron chip, a 20GB hard drive, 128MB of memory, a CD-rewritable drive, and a 15-inch flat-panel display. The same system with a 17-inch cathode-ray tube (CRT) monitor is still available for $200 less.
The 500S comes with similar features and a 1.5GHz Intel Pentium 4 chip for $1,397 after a $100 rebate. The 700S includes a 1.8GHz Pentium 4, an 80GB hard drive, 256MB of Rambus memory, a combination DVD/CD-RW drive, and a 15-inch flat-screen monitor for $1,799.
Gateway is relying on varied bundles of hardware, software and services to spur sales this holiday season. The new promotion is also part of its effort to take advantage of any PC-buying interest spurred by Microsoft's recent launch of the Windows XP operating system.
The No. 2 direct seller of PCs has been losing ground in a slow PC market. According to third-quarter sales estimates from market researcher Gartner Dataquest, Gateway had 7.4 percent of the overall U.S. market in the third quarter, down from a 9 percent share in the same period last year.
Gateway has said it expects to see an increase in PC sales this quarter, compared with the prior quarter. The company also hopes to post a pretax profit for the quarter, excluding any one-time charges.
Meanwhile, top dog Dell has been the lone company gaining share and boosting its sales in recent months. The company, which now controls nearly a quarter of the U.S. market, has launched a $599 prebuilt system aimed at luring PC buyers who have traditionally gone to retail stores.
For its part, Gateway has already revamped its Web site to reflect its new focus on flat and plans to make the liquid-crystal displays ubiquitous in its Country stores as well.
"You'll see a very obvious focus on LCDs when you get there," Farwell said.
The move illustrates the further coming of age for the flat-panel display. Such displays have been seen replacing CRTs for some time but have become more mainstream this year as prices have tumbled.
Apple Computer, for example, has already phased out stand-alone CRT monitors, although the iMac all-in-one computer still uses a traditional monitor.