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AP Slams Gateway 2000 Marketing Effort

Gateway 2000's new "Your:)Ware" marketing plan took a nice slam in a recent Associated Press story that started off: "Ah, marketing! Given the right spin, every sow's ear may hope to shine as a silk purse--or at least be priced like one."

Gateway has taken to running ads for a program called Your:)Ware, billed as "the last computer you'll ever buy." The idea is that you pay as little as $49.95 a month and "you get to build a computer that's right for you today and trade it in for the hottest thing two years from now," the AP said. Internet access is bundled into the price.

Said the AP:

"Not until you get to the bifocal-bedeviling fine print in the ad do you discover that:

  • You're being asked to finance the purchase over four years at an annual percentage rate of 14.9 percent (or more) and that you can't "trade in" until the 24th month.
  • The value of your trade-in will be determined at Gateway's sole discretion by the average wholesale value of your machine and its condition at the time of trade. (Note the word "wholesale." Computer systems that sold for $2,000 two years ago now retail for about $500 and wholesale for less than that.)"

"It's difficult to decide whether this is 'obsolescence protection'--as Gateway calls it--or 'revenue stream protection,'" the article said. "The difference between borrowing $2,000 at 14.9 percent over four years versus cash is almost $667, which is a lot to pay for the right to spend more money two years from now for what might amount to saving $300 to $400 on a new system--and the saving could be lots less."

See "Gateway Bundles Net Access With PC Leasing Plan" for more.