Gateway (in case this isn't obvious by now) is really trying to own the home consumer market. It's always been their strength, and their playing it for all it's worth right now. Their ads say, 'Look, we've got sweet systems at competitive prices, you know our name, so buy from us.' They don't want a part of the sub $1K market; it's apparently not worth their while. They're betting people will want to spend more than that to get a better system and a better name (I'm not saying that CPQ, HWP, or Dell are any less of a name, but Gateway does have a name with the consumer). I think they're probably not flat out wrong, though they may very well still struggle to increase earnings; that's not so much a function of their strategy as it is their management. Is gateway.net a good idea? Hard to say how profitabl that can be, but if gateway.net provides good service and get a good reputation, it'll sell more of their machines.
FWIW, my exit last week at 26 looks like pretty bad timing today. My small profit could have been somewhat larger.
Randy |
