Information about Gateway, Inc.

Gateway, Inc.
thumb}		company_type = Public (NYSE: GTW)	foundation = September 5, 1985 (as Gateway 2000)	location = Irvine, California, USA	key_people = J. Edward Coleman, CEO Richard Snyder, Chairman Ted Waitt, Co-Founder Mike Hammond, Co-Founder	industry = Computer hardware	products = desktops,laptops,servers.	revenue = $3.980 billion USD	Employees = 2,000	homepage = www.gateway.com
Founded
Headquarters

Gateway, Inc. is an American computer hardware company based in Irvine, California, which develops, manufactures, supports and markets a wide range of personal computers, computer monitors, servers, and computer accessories. In the early and mid-2000s, the company struggled; after years as a fixture on the Fortune 500 list of largest companies worldwide, the company was not listed in 2006, having dropped to number 508. Gateway became widely known in 1991 when they started shipping their computer hardware in cow-spotted boxes, their creative advertising in Computer Shopper and other magazines, and good reviews.

On August 27, 2007, Acer announced it will be acquiring Gateway for approximately $710 million.^[1] The $1.90 share price is far below the $4 average Gateway held in the mid 1990s.

On September 4, 2007 Gateway announced that it has signed a definitive agreement to sell its Professional business segment to MPC Corporation. This includes the company's Nashville-based configuration center.

History

Gateway was founded on September 5, 1985, on a farm outside Sioux City, Iowa, by Ted Waitt and Mike Hammond. Originally called Gateway 2000, it was one of the first widely successful direct sales companies, utilizing a sales model copied from Dell, and playing up its Iowa roots with low-tech advertisements proclaiming "Computers from Iowa?". Shipping computers in spotted boxes patterned after cow markings (specifically, those of Holstein cows) became a Gateway standard. In 1989 Gateway moved its corporate offices and production facilities to North Sioux City, South Dakota. In line with the Holstein cow mascot, Gateway opened a chain of retail stores called Gateway Country Stores, mostly in suburban areas across the United States. It dropped the "2000" from its name on December 31, 1998.

In 1998, Gateway relocated from North Sioux City, South Dakota to San Diego, California and then in 2001 made another move to Poway, California. After acquiring eMachines in 2004, Gateway again relocated their corporate headquarters to Irvine, California.^[2][3]

Gateway purchased the Amiga assets from Escom in 1997 and since 2000, this Amiga intellectual property has been licensed to Amiga, Inc.^{[4] [5] [6]}

Gateway struggled after the dot-com bust and tried several strategies to return to profitability, including withdrawal from international markets, reduction in the number of retail stores and most significantly, entering the consumer electronics business. However, none of these efforts were particularly successful from a financial standpoint, and Gateway continued to suffer major losses as well as market share in the PC business. By April 1, 2004, Gateway had announced that it would shut down its 188 remaining stores.

On March 11, 2004, Gateway purchased low-cost PC marketer eMachines, for $30 million in cash and 50 million shares of stock, valuing the deal at approximately $262 million with announced intentions to keep the eMachines brand. Gateway had hopes that eMachines' retail channel strength would complement its own strengths in consumer and business direct channels. Through the deal, founder Ted Waitt turned over day-to-day responsibilities and the CEO role to eMachines' CEO, Wayne Inouye, and remained as chairman through May 2005. Inouye announced his resignation as CEO on February 9, 2006; Chairman Richard Snyder served as interim CEO until September 7 2006 when J. Edward Coleman was brought in as the new CEO. Gateway still sells both Gateway and eMachines brand computers through retail vendors like Circuit City, Best Buy, TigerDirect, and CompUSA. Its Gateway brand products continue to be available in direct channels.

Like most large corporations, Gateway has outsourced some of its operations, such as customer support. In 2002, Gateway expanded into the consumer electronics world with products that included plasma screen TVs, digital cameras, DLP projectors, wireless internet routers and MP3 players. While the company enjoyed some success in gaining substantial market share from traditional leaders in the space, particularly with plasma TVs and digital cameras, the limited short-term profit potential of these product lines led then-CEO Wayne Inouye to pull the company out of that segment during 2004. Gateway still acts as a retailer selling third-party electronic goods online.

Recently, Gateway has resourced customer support within North America, priding itself as "100% North America-based support". Gateway has also moved build-to-order desktop, laptop, and server manufacturing back to the United States, with the opening of its Gateway Configuration Center in Nashville, Tennessee in September 2006. It currently employs 385 people in that location. As of April 2007 Gateway notebook computers were produced in China and its desktops had "made in Mexico" stickers.

Gateway's stock price has consistently trended lower since 2000 when in January shares were valued at over $60 but now as of September 12 2007, the share price sells at $1.85. This information is reported from Yahoo! Finance

On August 27, 2007, Acer announced plans to acquire U.S. based rival Gateway Inc. for US$710 million. J.T. Wang, the company's chairman, said in a statement that the acquisition "completes Acer's global footprint, by strengthening our U.S. presence."[1]

Current products

Hardware

Gateway sells to specific markets including Home & Home Office, Small Business, Gaming, Medium & Large Business, Government and Education. They do not use brand names to market products, instead using product models. They currently market a range of laptop products for the home markets including the C140X, NX100X, CX210, NX260X, NX560 and NX860 series.^[7] They also market a range of desktops including the DX420, FX510, FX530, and Profile 6 series. These products are advertised as affordable and productive computers. Their lowest priced system is the DX420B Series, with a monitor sold separately.^[8]

Gateway currently sells seven LCD-based computer monitors as of September 25, 2006, including one 15" model, two 17" models, three 19" models, and one 21" model. Some include USB ports.^[9]

In September 2002, Gateway entered the consumer electronics market with aggressively priced plasma TVs. At the time, Gateway's $2,999 price for a 42" plasma TV undercut name brand competitors by thousands of dollars. In 2003, the company expanded the range of plasma TVs and added digital cameras, MP3 players and other devices. By early 2004, in terms of volume, Gateway had moved into a leadership position in the plasma TV category in the US. However, pressure to achieve profits after the acquisition of eMachines led the company to phase Gateway-branded consumer electronics out of their product line.

Gateway also markets "Convertible Notebooks", notebook PCs combined with tablet PC technology including handwriting recognition with a stylus much like a personal digital assistant (PDA).

Gateway sells a line of low-end to medium-sized PC servers. These servers are manufactured by what was Advanced Logic Research, a former pioneer in PC servers, which was acquired by Gateway.

Gateway's latest All-in-One computer, called the Gateway One has been described thus: "The no-compromise elegant design, simplicity and expandability of Gateway's newest all-in-one PC brings sophistication to computer design, proving PCs don't have to be boxy and boring."^[10]

Software

Gateway currently ships Microsoft Windows Vista as the operating system of choice for its computers, beginning on January 29, 2007, including Premium editions of Windows Vista. Gateway also sells "bare-bone" computers without any pre-installed software upon request but not through its website yet . On the computers that come with Microsoft Windows Vista, Gateway bundles a large quantity of various software. Similar to Dell, Gateway has been accused of shipping spyware. Gateway, with newer computers, also includes "BigFix" - an update/customer support program.

Corporate affairs

Business model

Gateway directly and indirectly sells its products to third-party retailers, consumers, businesses, government agencies and educational institutions.

According to the 2005 Annual Report^[11], Gateway has three major business segments: Direct, Professional, and Retail.

• The Direct segment sells to consumers and small business customers using both the Internet and call centers.
• The Professional segment sells to medium-to-large businesses, educational institutions (K-12 and higher education) and government agencies (federal, state and local) using telephone-based and field sales teams, complemented by local, regional and national value added resellers and facilitated through customized websites.
• The Retail segment sells products directly to retailers, such as consumer electronics stores, computer superstores and warehouse clubs. eMachines branded PCs are sold exclusively through the retail channel.

According to the 2005 Annual Report, "The retail channel has become Gateway's largest distribution channel." Gateway used to run a retail chain of stores selling their products, however these were closed down in 2004.

Gateway competes mainly against Dell, Hewlett Packard, Apple Inc., Lenovo, Sony and Toshiba. In particular regions and outside the United States, Gateway competes with Acer, Fujitsu and Packard Bell.^[12]

Organization

A Board of Directors of six people runs Gateway. Richard Snyder, former interim CEO, serves as Chairman on the board. Other board members include George Krauss, Douglas Lacey, Joseph Parham, Jr, Quincy Allen, David E. Russell, and Scott Galloway. Shareholders elect the board members at meetings, and those board members who do not get a majority of votes must submit a resignation to the board, which will subsequently choose whether or not to accept the resignation. The corporate structure and management of Gateway extends beyond the board of directors.

On September 7, 2006 the Board or Directors announced the appointment of J. Edward Coleman as chief excutive officer. Coleman replaces Snyder, who served as interim CEO since February of that same year, and will remain Chairman of the Gateway Board of Directors.^[13]

See also

• List of past Gateway products
• List of Computer System Manufacturers

References

External links

• eMachines official website
• Gateway homepage
• Installation Instructions for Gateway Laptops
• Yahoo history of Gateway

•  • [ e] Gateway, Inc.
Corporate Directors: Richard Snyder (Chairman), Quincy Allen, Janet Clarke, George Krauss, Douglas Lacey, Joseph Parham, Jr., Paul Weaver, Scott Galloway
Current products (list) Laptop Computers: CX200, NX260X, NX500, NX510, M325X, NX560, NX860 Desktop Computers: DX110, DX210, DX300, DX310, FX510, Profile 6
Past products
Annual Revenue: $3.854 billion USD (2006) | Employees: 1,800 (2006) | Stock Symbol: NYSE: GTW | Website: www.gateway.com

•  • [ e] Major computing companies
Cellular hardware	HTC Motorola Nokia Palm Qualcomm RIM Sony Ericsson
Conglomerates	Hitachi LG Matsushita NCR Philips Samsung Siemens Sony Thomson Toshiba
Computer hardware	Acer ASUS Dell Fujitsu Siemens Gateway Lenovo Quanta
Computer networks	Alcatel-Lucent Avaya Cisco Ericsson Huawei Juniper Nokia Siemens Nortel ZTE
Dot-com/web services	Amazon.com AOL eBay Google Microsoft Yahoo!
Electronics manufacturers	Celestica Elcoteq Flextronics Foxconn Jabil Kimball Plexus Quanta Sanmina-SCI SMTC Solectron Ultraflex
Storage	EMC Maxtor NetApp Seagate Western Digital
Semiconductors	AMD Broadcom Elpida Fairchild Freescale Hynix Infineon Intel Micron National NVIDIA NXP Qimonda Renesas Rohm Sharp STMicroelectronics TI TSMC VIA
Software	Adobe CA EA Intuit McAfee Microsoft Nintendo Novell Oracle Red Hat SAP Symantec
Telecom	Amrica Mvil AT&T BT Cablevision Comcast Deutsche Telekom Earthlink France Tlcom KT NTT Orange Qwest RCN Rogers SK Telecom Sprint Nextel Swisscom T-Mobile Telecom Italia Telefnica Telmex Time Warner Verizon Virgin Vodafone
Vertically integrated manufacturers	Apple HP IBM NCR NEC Sun