Gateway to offer ready-made computers

Change aims to fill customer demands

March 18, 2002|By BLOOMBERG NEWS

POWAY, Calif. - Gateway Inc., a direct seller of build-to-order personal computers, plans to begin selling ready-made models at most of its 277 stores because some customers don't like placing orders and waiting for delivery.

Gateway, the second-biggest direct seller of personal computers, said it will offer an $899 model and a $1,299 model and will later add more computers.

"Most of the people who came to the stores were not aware you could not take a computer home with you that day," Gateway spokeswoman Ashley Wood said. "This is for those people who want to take a computer home that day."

Gateway will have about 10 to 20 PCs on hand at most of its stores, Chief Financial Officer Joe Burke said during a Feb. 27 meeting with analysts. The move won't do much to boost overall sales, said David Bailey, an analyst with Gerard Klauer Mattison & Co.

"This is more of a tweaking of the model rather than an overhaul," said Bailey, who rates Gateway shares a "neutral" and doesn't own any. "I don't think this part of the strategy will change investors' viewpoint on the stock."

The stock has fallen 61 percent in the past year. It closed at $5.60 Friday.

Gateway is trying to compete more effectively with Dell Computer Corp., the largest PC maker. It has been offering lower prices and is aiming to sell additional services and goods, which are more profitable than PCs. Last month, Gateway said losses this quarter and this year will be wider than analysts had forecast because of falling prices for PCs.

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