Gateway to launch business PCs

Gateway Inc. will launch a small desktop PC and a large notebook for business customers in November, alongside its first convertible Tablet PC product, the company said Thursday.

The Poway, California, company will update its Profile line of space-saving business PCs with the flat-screen Profile 5, which preserves the small footprint of the Profile 4 at a lower base price, said Mike Stinson, vice president and general manager of mobile products. Gateway also plans to release in November the Gateway 675, a widescreen desktop replacement notebook for business customers, he said.

Gateway has attempted to improve its declining revenue with a plunge into the world of consumer electronics, but has continued to release new PCs over the course of the year. Dell and HP are trouncing Gateway in the PC market, but Gateway’s third-quarter earnings, released Thursday, show the company has made progress with its consumer electronics business.

PC sales fell 24 percent in the third quarter of 2003, driving Gateway’s overall third-quarter revenue down to $883 million, compared to third-quarter 2002 revenue of $1.1 billion. Revenue from products other than PCs rose 43 percent from last year’s third quarter to $251 million, but that wasn’t enough to prevent a net loss of $139 million in this year’s third quarter.

Aiming to regain PC market share, the company is focused on development of interesting industrial designs to compete against market leaders Dell Inc. and Hewlett-Packard Co. (HP), Stinson said.

One example of that is Gateway’s Profile line of PCs, which occupy about as much space as a conventional CRT (cathode ray tube) monitor. Users can choose among 15-inch, 17-inch, and 19-inch displays that hide the PC’s chassis, Stinson said.

The PCs are designed for high-traffic areas where space is a consideration, such as in hospitals or retail outlets, Stinson said. The base of the PC comes with a mounting bracket so it can be attached to a wall or under a shelf.

Businesses and consumers alike can purchase a variety of fixed configurations, depending on performance needs. Basic and high-performance versions are available for the 15-inch, 17-inch, and 19-inch models. The high-end models come with the latest Pentium 4 processors from Intel Corp., wireless 802.11g networking, and DVD-RW drives.

A base configuration of the Profile 5 for consumers comes with a 15-inch LCD (liquid crystal display) screen, Intel’s Celeron processor, 256M bytes of RAM, a 40G-byte hard drive, and a combination CD-RW/DVD-ROM drive for US$1,099, which is $200 less than the base price of Gateway’s Profile 4 PC. The least expensive option for business customers features a 15-inch display, a 2.6GHz Pentium 4 processor with hyperthreading, 256M bytes of RAM, a 40G-byte hard drive, and a CD-RW/DVD-ROM drive for $1,399.

The Profile 5 is expected to be available Nov. 3.

Gateway’s new 675 notebook is almost as large as the Profile 5, but is not designed for mobility, Stinson said. The 17-inch widescreen display will help financial professionals view two spreadsheets side-by-side on the screen while they enter figures on a numerical keypad. Most notebooks don’t come with the numerical keypad found on the right side of a typical desktop keyboard.

Widescreen notebooks have become very popular with consumers looking for desktop multimedia performance in a notebook they can carry around their homes. Gateway is hoping that business customers will also want a performance notebook that, while not suitable for business travel, could be carted down the hall to the conference room.

The Gateway 675 comes with a 3.06GHz Intel Pentium 4 processor with hyperthreading, 512M bytes of RAM, a 60G-byte hard drive, a CD-RW/DVD-ROM drive, a Radeon 9600 graphics card from ATI Technologies Inc. with 64M bytes of video memory, and 802.11g wireless networking for $1,999. It is expected to launch Nov. 6.

Gateway will also release its first convertible Tablet PC design in late November, Stinson said. Gateway sells a slate Tablet PC device designed and manufactured by Motion Computing Inc., but the Gateway M275 Tablet PC is a notebook design with a screen that swivels to cover the display when used in Tablet PC mode. Stinson declined to provide further details about the new Tablet PC.