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Gateway to unveil new Profile

The PC maker plans to introduce an upgraded version of its all-in-one desktop PC at the end of August, sources say.

Gateway plans to introduce an upgraded version of its all-in-one desktop PC at the end of August, sources familiar with the company's plans said.

The new Profile 4 computer will add the finishing touches on a redesign of Gateway's product line. The PC maker launched a new silver and black "Platinum" design for its consumer PCs last April and has since converted its business PC models to the new color scheme.

As previously reported, the Profile 4 will incorporate a Pentium 4 processor from Intel, and include a larger 17-inch display. The current Profile 3 machine includes a 1.3GHz Celeron chip and a 15-inch display. It sells for $1,649.

The company plans to introduce the Profile 4 by highlighting Gateway's attention to design as part of an advertising campaign. The new Profile 4 will be slimmer and sleeker, sources say, than the Profile 3, whose components are housed behind the screen.

The current ad campaign and low prices have been somewhat successful in boosting sales for Gateway. The company increased unit sales during the second quarter to 651,000 units, up from 645,000 in the first quarter.

But Gateway has since returned to more product-focused advertising, touting its back-to-school computer deals.

Gateway has said the Profile line is profitable and has helped raise awareness of the company's products. Gateway provided the Winter Olympics in Salt Lake City, Utah, with 5,700 Profile 3 machines, for example.

But the Profile 4 will be nearly alone in the all-in-one computer space. IBM, which also sells the all-in-one NetVista X, plans to phase out the machine by the end of the year.

All-in-one computers haven't typically sold as well as traditional PCs with separate monitors. Cost is one factor, as buying a PC and a monitor separately is often less expensive than buying an all-in-one computer. Also, consumers often want to upgrade PCs more frequently than monitors, as the average life span of monitors is seven years.

Profile 4's main competition will be Apple Computer's revitalized, 17-inch screened iMac. The machine was introduced Wednesday at the Macworld trade show in New York.

The new iMac includes a larger display, an 800MHz PowerPC G4 processor, 256MB of RAM, an 80GB hard drive, an Nvidia GeForce4 MX graphics card and a DVD recording drive for $1,999.

Gateway declined to comment on unannounced products.

News.com's Joe Wilcox contributed to this report.