Following, borrowed from the AMD thread, is not really good news:
=DJ Gateway CFO -2: Vows To Avoid 'Sole Supply' Chip Pacts
By Scott Eden
NEW YORK (Dow Jones)--Gateway Inc. (GTW) Chief Financial Officer John Todd
said a shortage of Intel Corp. (INTC) microprocessors and motherboards trimmed
$200 million to $250 million from the computer-maker's fourth-quarter revenue.
In an interview with Dow Jones Newswires, Todd said the shortages affected
personal computers costing $999 to $1,299, a range termed the "sweet spot"
because it is typically the company's highest volume category. Those machines
use Celeron processors and motherboards made by Intel.
"We never knew what we were going to get, when we were going to get it, so we
never had a coherent marketing strategy," Todd said.
To remedy the situation, Todd said the company will avoid "sole supply"
relationships with microprocessor makers. Currently, the company uses only chips
made by Intel, which has had some difficulty during the quarter meeting
stepped-up demand for its products. Only last fall, Gateway ended a brief supply
arrangement with Advanced Micro Devices Inc. (AMD), Intel's chief rival.
"We're not going to stand by and let the actions of others determine the
business of Gateway," Todd said.
Also taking a bite out of Gateway's top and bottom lines was a Y2K-related
slowdown in computer purchases from the business sector, Todd said, which carved
$100 million to $150 million from fourth-quarter revenue. As reported, Gateway
warned that fourth-quarter earnings would come in below analysts' estimates.
Gateway closed at 62 1/4, down 11/16, or 1.1% in NYSE trading. In late
trading, the stock was down 6, or 9.5%, at 57 on 2.9 million shares.
An Intel spokesman would not comment citing their quiet period surrounding
first-quarter earnings.
-By Scott Eden, Dow Jones Newswires; 201-938-5253
(END) DOW JONES NEWS 01-05-00
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