Consumer electronics devices showcase the new Gateway

Gateway wrapped up its recent push into the consumer electronics market during a launch event Tuesday with the introduction of new products ranging from a music player based on a hard drive to LCD televisions.

The Poway, Calif., company has also completed the redesign of 190 Gateway stores around the company’s new consumer electronics focus, said Ted Waitt, chairman and CEO, during a Web cast of the event from Gateway’s Union Square store in New York.

“We now have a much broader array of products than we’ve ever had before, and we have a unique environment to showcase them,” Waitt said.

Gateway’s transformation over the past year has come as part of a broader PC industry move into the consumer electronics world. Consumer electronics products such as digital music players, digital cameras and televisions are growing faster than the PC market, and are new enough on the market to command the higher prices and margins sought by manufacturing companies.

The PC market slump of the last few years had a pronounced effect on Gateway, which lost revenue and market share to vendors such as Dell and HP. The company has not posted a profit in several quarters.

In May, Gateway outlined its plan to become a consumer electronics vendor as well as a supplier of enterprise IT hardware such as servers and storage products. While developing these new revenue sources, the company also aggressively cut costs through layoffs, store closings and outsourced manufacturing.

By year-end, the company will have launched 100 new products in 20 new categories in 2003, a Gateway spokeswoman said. Most of the launches have gone smoothly, but a planned launch of a PDA in August was delayed beyond the fourth quarter.

Gateway is unique among its competitors in both the PC and consumer electronics business in that it maintains its own retail stores throughout the U.S. Those stores have been redesigned to allow Gateway salespeople to demonstrate their products for customers, such as taking a digital picture with a Gateway camera, loading it onto a Gateway Media Center PC and printing that image on one of the printers from other vendors sold by Gateway, Waitt said.

At the launch event, Gateway announced several new products:

* The Gateway DMP-X20 music player will launch with a 20G-byte hard drive for $299, Waitt said. It measures 3.9 inches high by 2.6 inches deep by 0.83 inches thick (9.9cm by 6.6cm by 2.1cm) and weighs 7.7 ounces (216 grams). Gateway is taking preorders as of Tuesday, and the device will be available on Nov. 26

Apple’s 20G-byte iPod music player is a little longer, but weighs 5.6 ounces and costs $399. Dell’s 20G-byte DJ 20 music player costs $299 after an instant $30 rebate and weighs 7.6 ounces.

* Gateway also introduced two digital cameras during Tuesday’s event. The 2-megapixel DC-T23 costs $129, and the 4.1-megapixel DC-M42 costs $249. The T23 is designed as a pocket camera, measuring 3.4 inches wide by 1.6 inches high by 1.2 inches thick, while the M42 allows more serious photographers to capture quality images, Waitt said. The cameras are available immediately.

* The Gateway 901 Media Center PC is designed to fit into a home entertainment center, while still providing all the performance of a normal PC with a wireless keyboard and mouse. It will cost $999 when it is released at the end of November, Waitt said. Information about the 901’s specifications was not immediately available.

* Gateway was selling Motion Computing Inc.’s slate Tablet PC device under its own brand name, but introduced its own convertible Tablet PC Tuesday. The Gateway M275X uses a 1.4 GHz Pentium M processor, 256M bytes of DDR (double data rate) SDRAM (synchronous dynamic RAM), a 40G-byte hard drive, a DVD-ROM/CD-RW (CD-rewritable) drive and an 802.11b wireless chip at a starting price of $1,799. The more expensive M275XL with a faster processor, more memory and more storage space will also be available along with the M275X starting on Nov. 13.

* Two multimedia notebooks were announced: a 17-inch widescreen model and a 15.4-inch widescreen notebook. The 17-inch Gateway 675X comes with a 3.0GHz Intel Pentium 4 processor with hyperthreading, 512M bytes of DDR SDRAM, a 60G-byte hard drive, a DVD-R/-RW/CD-RW drive, 64M bytes of video memory and an 802.11g wireless chip for $1,999. The 15.4 inch M505X comes with a 1.4 GHz Pentium M processor, 512M bytes of DDR SDRAM, a 40G-byte hard drive, a DVD-ROM/CD-RW drive and an 802.11b wireless chip for $1,599. A more expensive configuration of each notebook will also be available.

The 675 is available immediately, and the M505 will be available on Nov. 13.

* To complete the digital home, Gateway also announced a $349 DVD+RW/+R external recorder, a $1,499 23-inch LCD television, a $2,299 26-inch LCD TV and home networking products.

* Business customers were not left out of Tuesday’s product announcements. Gateway will provide more details about two new storage products at Comdex next week in Las Vegas, including a device that combines the Serial ATA interface with JBOD (just a bunch of disks) technology and the company’s first networked-attached storage device, Waitt said.