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Technology Stocks : Gateway (GTW)

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To: PeterR1700 who wrote (4440)10/29/1997 11:06:00 AM
From: Karl Stearns  Read Replies (1) of 8002
 
It's what's in the box. Go to both web-sites and configure ANY two systems exactly the same. You will find that Gateway consistently comes out cheaper. Dell has been playing this game all along. They configure systems that LOOK ok, until you compare apples to apples (maybe that's a poor choice of words...VBG). Gateway has always put more guts in their systems for the money. For example: A top of the line G6 300 from Gateway will have less RAM, but a bigger monitor and hard drive. If you take the g2k system, and adjust it so it matches up (actually down) to the Dell specs, then price it, you find the price is $150 cheaper than Dell. Anyone who is moderately intelligent and knows how to comparison shop will discover the Gateway is always a better buy. This doesn't even address the fact that G2K always loads better software packages with their systems, too. And PLEASE--nobody start flaming me about G2K service. I paid the $99 for the upgraded support. I have a 3-year on-site service contract plus a dedicated 800 number to call. The few times I've needed to call, I got through just as if they were waiting for my call. And as usual, the problem was not a problem with their equipment, but a software related difficulty (which is the most common problem--and yet people blame the computer company for it!!).

Gateway has positioned itself to go after the server market, which will also continue to help it's corporate sales. Government accounts, corporations and small businesses are more likely to continually upgrade product. The average home user may buy a system from someone else, but they do not upgrade as frequently. I'll bet anything that everybody who's buying the $900 systems from CPQ and Dell will at least give Gateway a look, and a good percentage of them will buy Gateway when they're ready to move up to a REAL system.

I also think G2K may have been ahead of their time with the Destination system. However, I believe those efforts will pan out for them eventually as more and more people move into upgraded systems. The advancing technology in cable, dss, DVD, etc, etc, will make systems like the Destination a sought-after item in the future. Gateway will be way ahead of others in understanding and producing this technology.

Gateway has spent enormous sums setting up state of the art manufacturing facilities and customer service centers. There is tremendous underlying value in this company. Who knows what the future will hold? Perhaps they will still be bought out by someone else. Or perhaps their efforts to position themselves in the marketplace will pay back big dividends in terms of sales and market shares. Whatever the case, I believe there is a lot going for this company and it's stock will return handsome profits for those who buy it and leave it alone.
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