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

To: zalesky who wrote (5893)	5/27/1998 11:17:00 AM
From: The Duke of URL©	Read Replies (1) \| Respond to of 8002

the news is that gateway is now going to sell computers like chrysler leases cars. Article is on SI news. I cant cut and paste from here, but you can clic on it.

To: zalesky who wrote (5893)	5/28/1998 7:20:00 AM
From: harkenman	Respond to of 8002

GATEWAY WILL OFFER consumers a choice of Web-browsing software when they sign up for Gateway's Internet service, in a major concession from Microsoft. Starting with systems equipped with Windows 98, Gateway plans to install Netscape's browser as well as Microsoft's browserAgreement With Microsoft Allows Gateway to Install Netscape on PCs By EVAN RAMSTAD Staff Reporter of THE WALL STREET JOURNAL Gateway Inc., taking a defiant stance toward Microsoft Corp., will modify Windows 98 to emphasize its own Internet service and offer consumers a choice of Web-browsing software. Starting with its first Windows 98-based systems next month, Gateway will install Netscape Communications Corp.'s Navigator browser as well as Microsoft's Internet Explorer browser. Previously, Gateway chose only to install Microsoft's Web software on its PCs because Netscape charged for its product and because it wanted "to preserve our relationship with Microsoft," said Bart Brown, a Gateway marketing manager. Netscape recently began giving away Navigator. Have It Your Way A sampling of Gateway's new PC-payment options (plans are for four-year periods). Sample I $49.95 per month 266 MHz Pentium II 32 MB memory 2 GB hard drive 15" monitor Microsoft Home Essentials program Unlimited Internet access through gateway.net Microsoft Internet Explorer and Netscape Navigator Sample II $59.95 per month 266 MHz Pentium II 32 MB memory 5 GB hard drive 15" monitor DVD drive Color ink-jet printer Microsoft Home Essentials program Unlimited Internet access through gateway.net Microsoft Internet Explorer and Netscape Navigator Sample III $69.95 per month 400 MHz Pentium II 64 MB memory 8 GB hard drive 17" monitor Microsoft Home Essentials program Unlimited Internet access through gateway.net Microsoft Internet Explorer and Netscape Navigator Meanwhile, Gateway's push of its own Internet service will hurt Microsoft's efforts to steer consumers to various Internet-service providers with whom it has a relationship. In a concession, Microsoft recently agreed to allow Gateway to modify its new Windows 98 operating system in a manner that would steer first-time Internet users to Gateway's own access service, called gateway.net. On most other PCs running Windows 98, the "get connected" button takes users to a Microsoft list that highlights service providers who are paying Microsoft for the privilege. Gateway announced the arrangement as it unveiled a marketing initiative through which it will sell PCs, software, Internet access and other services to consumers under several long-term installment payment options. Under that plan, a person could spend as little as $50 a month over a four-year period for a PC, monitor and unlimited Internet access. The arrangement, announced Wednesday, was finalized within the past month as state and federal regulators approached the filing of antitrust lawsuits against Microsoft, although executives said it was reached before the actual filing of those suits on May 18. Key issues in those suits are Microsoft's alleged tactics in defending a monopoly in PC operating systems, including restrictions on the right of PC makers to remove Microsoft's Internet software or modify the appearance of PC display screens. Microsoft, whose court battle with federal regulators is set for trial on Sept. 8 in federal court in Washington, has denied any wrongdoing and vowed a vigorous defense, arguing that its business practices have reduced the cost of computing and improved consumer access to an array of programs. The Gateway-Microsoft negotiations highlight broader tensions between PC firms and the software maker regarding the kinds of services and products each can offer on the same turf -- the screen of a PC. "We want to be able to deliver customer choices," said Jeff Weitzen, president and chief operating officer of Gateway. "Today, the issue is the choice of the browser and Internet-service provider. Tomorrow, who knows what it will be?" Negotiations with Microsoft took months, raising the ire of Gateway Chairman and Chief Executive Officer Ted Waitt, who said in an interview he felt the company was put in the position of asking Microsoft for permission on how to build its own PCs. "They offer the dominant operating system in the world. They offer a lot of applications. They have a Web browser. They also have an Internet service," Mr. Waitt said. "It's really hard to draw a line, but how we integrate those should be up to the customer and up to us." Mr. Waitt said he didn't know whether the pressure of the lawsuits influenced Microsoft in its negotiations with his company, but added: "We've been talking to them about these issues for quite some time. Recently, they seemed a lot more flexible." Yusuf Mehdi, Microsoft marketing director, said the antitrust investigation had no bearing on negotiations. "There are all sorts of technical considerations that go into making these changes," he said. Gateway, based in North Sioux City, S.D., is the sixth-largest PC maker and one of three major producers who deal directly with customers rather than wholesalers. It builds machines to custom specifications after an order is received. Executives say its new marketing initiative is a step toward developing a longer-term service relationship with consumers, rather than asking customers to plunk down $1,500 or more for a computer. Other manufacturers have started similar programs, though none are as ambitious as the Gateway offering, which the company will market as "YourWare." TV commercials began Wednesday. The company launched its Web service last fall with the aim of eventually bundling it with PC-hardware pricing. Some details of the program remain to be worked out, particularly how trade-ins will be made while still preserving a consumer's software. Mr. Weitzen said Gateway's payment plans will result in a lifetime pricing that is several hundred dollars less than its rival Dell offers under a consumer-leasing program that it began last fall. A Dell executive said that, while the company reviews its pricing offerings often, it doesn't currently plan to switch to installment payment plans.