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Technology Stocks : Gateway (GTW) -- Ignore unavailable to you. Want to Upgrade?

To: jas cooper who wrote (4529)	11/3/1997 9:39:00 PM
From: wolfdog2	Read Replies (1) \| Respond to of 8002

Jas, GTW has screwed up not a little but a lot. The comsumer PC business is now comoditized. The corporate business is owned by CPQ, Dell, IBM, and H P. Article in today's NYT pointed out that those four are grabbing more and more of the corporate market share. The little guys (and this would for sure, imho, include GTW) are being forced out. Imo, GTW waited too long to make its move into the corporate world. GTW may be increasing revenues, but they don't seem to be able to do it profitably. Also where is their $1000 computer? I looked at their web site yesterday. They have a package deal for about $1499, if I recall, which includes a printer and moniter. Not a bad price. But do CPQ and HP know something that GTW doesn't? Why do they offer $1000 computers without moniters or printers? I think that GTW hasn't yet caught on that to compete, you have to offer a computer for $1000 or under. CPQ sells one for $799 without moniter. Sure it doesn't put a candle to GTW's $1499 machine but so what? When Johnny-short-of-bucks looks to buy a computer for his kids, or maybe a second computer for himself, he's going to go to CPQ not GTW.

To: jas cooper who wrote (4529)	11/3/1997 10:19:00 PM
From: Neil_L	Read Replies (1) \| Respond to of 8002

<<I wonder what, other than current market sentiment, makes you think that DELL is any less a commodity product than GTW?>> I never said that DELL is selling anything more than a commodity...what they have managed to do is effectively manage their inventory turns, cashflow and costs, showing us all that it is possible to make oodles of money selling a commodity. GTW has been asleep at the wheel, imo assuming that their customers will stick around no matter what, and also not aggressively attacking the corporate market. I still have an older Gateway 486 that runs like a charm and has never given me an ounce of trouble...does that mean I bought my next one from them or will buy another from them? No...its a commodity and while service and support are important, PRICE by far is the most important factor. Now GTW is caught between a rock and a hardplace...their business model just does not seem capable of competing with DELL and CPQ, and the future holds no relief for them...if they can't make money now, how are they going to do it in a more price competitive arena? For those hoping the VTEL thing will somehow pull it all together, without trying to sound arrogant, I think you're grasping at straws...VTEL is losing about as much money as GTW. And the long term? I would say lets take a arbitrary amount of money, say $1000, and buy $1000 worth of DELL, a $1000 worth of CPQ and a $1000 worth of GTW at todays closing prices, and come back in 1 year...2 years...3 years...4 years...5 years and lets see what each of those $1000 are worth...my guess is that DELL and CPQ will far outperform GTW, even at todays expensive prices. Sorry to sound so negative on GTW, but thats the way I see it and thats why I'm short GTW.