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Branding, after all, is what you do to a cow

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Gateway is planning to release no less than 50 new and "branded" PC, server, network and consumer electronics products in a strategy to reverse its fortunes and return to profitability. However, Gateway still has structural issues to contend with, and its new marketing aims are likely to prove a challenge.

Company chairman and chief executive Ted Waitt told investors last week that Gateway, once a leading supplier of PCs, plans to turn itself into a branded integrator of "technology solutions".

He also claimed Gateway is on track to achieve "substantial" cost reductions having completed a series of store closures. Gateway now plans to complete five pilot retail stores in the third quarter of 2003.

The company is looking to new PC-based offerings and branded hardware to further boost the company's fortunes. Mr Waitt told analysts last week: "We've got to bring these new products to market to grow our revenue streams."

Gateway plans 15 branded consumer electronics products by year's end, four new mobile products, in addition to a redesigned notebook line, three Gateway branded systems and network products including a four-way server and Network Attached Storage device, and 28 branded peripherals and accessory products.

Products demonstrated by executives at last week's event included computing accessories such as USB storage devices, a large-screen notebook for multimedia, a DVD player capable of plugging into a home network, several LCD TVs, and a home theater in a box. Gateway also used the event to repeat its financial guidance for the second quarter of $798 million revenue and loss per share of $0.27.

Gateway appears to have suffered more than most big-name PC suppliers during recent years. The company has undertaken a number of strategies to revive its fortunes since Mr Waitt returned as CEO in January 2001, but has continued to lose money. Gateway still has structural issues to deal with, and it is likely to find adjusting its image to suit the very different perspectives of its two target markets, consumers and SMEs, challenging to say the least.

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