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Gateway CEO hints at future Amiga role

Internet + low-cost computers = Gateway strategy = Amiga?

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Gateway CEO Ted Waitt yesterday outlined the direct vendor's increasing focus on the Internet. And, reading between the lines a little, it looks like he's finally figured out what to do with Amiga. Gateway's problem is, as Waitt put it at the company's AGM yesterday, that "the days of everyone buying a $2500 PC are over". In other words, as PCs get cheaper, margins get eroded and Gateway doesn't make as much money as it used to. Waitt's solution is to focus on higher margin service business. That, plus software, accounts for eight per cent of the company's revenues -- Waitt said he wants to raise that figure to 20 per cent. Training and purchase financing are the two key services the company has its eye on expanding. Both are particularly suited to the small business sector, which is the Gateway's fastest-growing customer segment, said Waitt. And, following Compaq's lead last year with the acquisition of Alta Vista and Shopping.com, Waitt said Gateway will look to buy Internet companies to expand its business base. Yet cheap hardware is still part of the programme. Gateway president and COO Jeff Weitzen said the company's mainstay will continue to be home computers. And Waitt said later: "We feel the technology now allows for us to develop very low cost products and we are going to definitely play in that market... Right now we'll be at $499 or $599 or $399 -- we're still working that out." Start pushing much beyond that point and you move into the kind of low-cost system Amiga appears to be developing. In addition to maintaining OS development for existing Amiga machines, the company is, by all accounts, working on slimline home machines not dissimilar to the kind of thing Nintendo and Sony are developing, and Sega releasing -- games machines that also provide more general purpose functionality such as Net access, home networking and digital camera connectivity. Machines like these are essentially an evolution of the games console into something resembling the home computers of the early 80s, stuff like the Sinclair Spectrum, Tandy Color Computer, the Commodore Vic-20 and, ironically, the original Amigas. If Gateway is thinking in these terms, then Amiga boss Jim Collas' public lashing of his parent company (and former employer) last month, in which ha slammed Gateway for being far too PC-centric and largely ignoring its subsidiary, may well have had its desired effect. ®

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