Gateway Inc., the San Diego-based computer maker pushing to rebuild its business, is now on a price-whacking campaign.
“PC Price War ? Cool,” say print ads that appeared last week, announcing what the company calls the Gateway Guarantee.
The company announced that for a limited time, it will beat the nationally advertised price for comparable computers. It also laid down the challenge in television ads.
“From our perspective, there’s been a price war in the PC industry since we opened for business in 1985,” Gateway co-founder and CEO Ted Waitt said in a prepared statement.
“In the early ’90s Gateway , which at the time was a small player with just 750 employees , not only survived but thrived as others were driven out of business. So we’re veterans of this. In fact, we love it.”
He acknowledged the move was “aggressive.”
One published report had a Dell executive dismissing the campaign as a “gimmick.”
“This is the right thing at the right time, both for our customers and our business,” Waitt said in the statement. “It is exactly this kind of aggressive move that will ensure our long-term success and return to profitable growth in the future.”
Gateway marketers called on potential customers to present a rival company’s ad for a new personal computer or server.
Specifically, the company said it is looking for ads from Compaq Computer Corp., Hewlett-Packard Co., Dell Computer Corp., IBM, Sony Corp. and Toshiba Corp.
Rival products must have specifications at least equal to those of the Gateway product.
Gateway publicists said the initiative does not change the earnings guidance provided in the company statement of April 19. The company reported a net loss of $503 million on sales of $2.03 billion in the first quarter, ended March 31.
At the time, the company said it expects to “approximately break even on an income from continuing operations basis, excluding special charges, during the remainder of the first half of the year, despite seeing unit sales down slightly over 2000.
“For the second half of the year, the company expects unit sales to be up as compared with last year and expects to return to profitability on an income from continuing operations basis.”
Gateway bills itself as the second largest personal computer maker in the direct sales space. The company sells its products without a middleman.
Gateway made news in January when Waitt returned to the CEO’s office and several top executives left. That came after a year in which the company earned $241 million on revenues of $9.6 billion. Earnings had declined 45 percent from the previous year.
The company announced earlier this spring that it will move from University City to less-pricey space in Poway.
Buyers in the market now will find more than an offer from Gateway.
Last week was also the debut of Microsoft Corp.’s Office XP application suite, which Gateway and its competitors will sell.
