With the eMachines line, Gateway is hoping to gain market share with rock-bottom retail buyers. Although these PCs generally deliver lower margins than more expensive units, competition is fierce.
The latest salvo in this market involves offering recordable DVD drives in cheap PCs. The eMachines T2398, for instance, comes with a DVD+/-RW drive, 512MB of memory, an 80GB hard drive and an Intel Celeron D 340 (2.93 GHz) processor. It costs $499 after a $50 rebate.
Gateway isn't alone. Hewlett-Packard now lets customers upgrade CD-ROM drives to DVD +/-R/RW drives for free on HPshopping.com. Last summer, PCs with DVD burners typically sold in the $600 to $700 range.
Gateway also came out with two models under the $400 barrier, including $50 rebates: the $349 T3624 for $349 and the T3828 for $399. Both come with Celeron processors, 256MB of memory and 60GB to 80GB hard drives.
One of the fastest-growing PC companies in the late '90s, Gateway has been trying to right itself since August 2000, when computer sales began a dip. Although much of the PC market has recovered, Gateway continues to report quarterly losses. Since its merger with eMachines, however, the combined company has entered the retail arena and has begun again to sell PCs internationally.
