Feeds

Gateway never knowingly undersold

Depending on the kindness of rivals?

  • alert
  • submit to reddit

High performance access to file storage

Gateway yesterday launched a print and TV advertising campaign in the US in which it promised to beat the prices of any comparable PC or server sold by its rival.

It is not usually wise for - what, the fifth biggest (US) player? - to take the lead in a price war. But in the US PC market, IBM, Compaq, and HP don't really have the interest to turn Gateway's marketing hype into real dollars.

Which leaves Dell. Dell, now the world's biggest PC maker, declared this year that it will go as skinny as is required to protect sales and win market share. It can afford to sacrifice more profits than its rivals, because it operates at a lower cost structure (overheads were 9.2 per cent of sales for Dell in Q1, compared with 18.9 per cent for Gateway).

However, Dell doesn't need to force out Gateway just yet - there's plenty of second and third-tier players (for both companies) to attack. Gateway is relatively weak, but only in the sense that Dell is relatively strong.

The company went a little loony early last year when it cast off its cheap and cheerful roots to tout more expensive PCs and services. Better margins, but sales turned crap, when it failed to respond quickly enough to deteriorating market conditions with price cuts.

After a poor second half of the year, enough was enough. CEO Jeffrey Weitzen "retired" at the astonishingly early age of 44 and founder Ted Waitt came back to run the show.

This new advertising campaign will reinforce Gateway's new/historic image as a top-brand maker of cheap PCs. This will cost more in advertising than in real price cuts. ®

Related stories

Gateway flees Canada, scales back in Europe
Gateway issues profit warning - again
Waitt takes charge at Gateway

High performance access to file storage

More from The Register

next story
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
France bans managers from contacting workers outside business hours
«Email? Mais non ... il est plus tard que six heures du soir!»
Adrian Mole author Sue Townsend dies at 68
RIP Blighty's best-selling author of the 1980s
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.