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New eMachines desktops hit stores

But Gateway, which wants to place its own brand PCs on store shelves, launches only three new eMachines models.

Gateway on Monday took the wraps off of three new eMachines-brand desktops.

The new models, which range in price from $399 to $599 after rebates, incorporate faster processors and upgraded components but maintain the same basic prices as previous eMachines desktops.

Though the timing of the launch is typical for the eMachines line, this time Gateway launched only three new models, leaving off the traditional fourth model, which typically is priced between $650 and $699. The company's move is likely designed to set the stage for the addition of Gateway-brand PCs at retail stores.

Gateway, which acquired eMachines in March, has been aiming to approach retail sales with a dual-brand strategy, much like Hewlett-Packard's, under which eMachines-brand PCs sell for prices of up to $600 or $700 and Gateway-brand machines sell for prices of $700 to $800 or more. HP sells both HP Pavilion and Compaq Presario machines. Some HP models overlap on price and configurations, but the company markets Pavilions as being more high-end.

eMachines' new low-price desktop, the T2824, sells for $449 and comes with a $50 mail-in rebate. It includes a 2.53GHz Intel Celeron D 325, 256MB of RAM, a 40GB hard drive, a combination CD burner/DVD-ROM drive and an 8-in-1 memory card reader. It uses Intel's Extreme Graphics, which is a graphics processor that Intel builds into its chipsets.

eMachines T2958, priced at $549 before a $50 rebate, ups the processor to a 2.66GHz Celeron D 330, boosts RAM to 512MB and features an 80GB hard drive. Its CD burner and DVD-ROM drives are separate, versus the combination drive in the 2824 model.

eMachines $649 T3092 comes with Advanced Micro Devices' Athlon XP 3000+ processor, 512MB of RAM, a 160GB hard drive, a DVD burner and a CD-ROM drive, and an Nvidia GeForce 4 MX graphics card. It also offers a $50 rebate, lowering its price to $599.

So far, eMachines has helped Gateway boost its PC sales and its overall revenue. Although the company still expects to report a loss for the quarter, Gateway upped its second-quarter revenue estimate to $860 to $880 million from $798 million, thanks in part to retail sales, the bulk of which are eMachines PCs.

Since buying eMachines and appointing Wayne Inouye, eMachines former CEO, as its chief executive, Gateway has been working to simplify its product lines and ink agreements with retailers, as part of an effort to place Gateway-brand PCs and consumer electronics products on their shelves. Doing so will help pump up sales, Gateway believes.

But the road has been difficult. Gateway has closed its own retail stores and announced plans for thousands of layoffs. But the company appears to be making at least some progress toward its goal of establishing broader relationships with retailers.

Best Buy will sell some Gateway consumer electronics gear, beginning this month. However, the items Best Buy will sell are left over from Gateway's retail store closings. Thus the agreement will end once the inventory runs out.

Still, it's possible the deal will open other doors for Gateway, which has said it wants to negotiate agreements that would place its PCs on retail shelves in time for the back-to-school season.

Gateway-brand models appearing at retail stores will likely start at around $799 and go up to more than $1,000.