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Gateway Debuts 3-in-1 MP3 Device

With the downturn in the PC sales market showing no signs of letting up, Gateway is pushing ahead with plans to diversify into the consumer space, introducing a lightweight MP3 player -- about the size of a pack of gum -- that offers USB storage and voice-recording capabilities.

Just months after closing 76 retail stores and cutting staff, the Poway, Calif.-based firm announced the first three-in-one Gateway Digital Music Player, which will hold at least 128MB of data and run with a single AAA battery.

The low-end 128MB version of the device, which is also known as the DMP-200 and which retails for $129.99, will support playback of music files in the MP3 or WAV format. It also comes with a simplified drag-and-drop feature to move music and data files from a user's PC to the portable device.

The company plans to introduce a 256MB version on Aug. 14 that will retail for $169.99.

The latest push by Gateway to market MP3 players comes as momentum builds in the legal digital music space. With music fans demanding portability of content, it is a logical step for Gateway to expand into portable music players.

It is not Gateway's first foray into the consumer electronics space. Earlier this year, the company announced plans for its own branded PDA device. It also markets LCD and plasma screens to the consumer market, and the company has said it has plans to beef up its overall commitment to consumer electronics throughout the year.

"(This) advances our goal of launching 50 new Gateway-branded products in 15 categories this year. The Gateway Digital Music Player marks significant progress in Gateway's evolution into a branded integrator -- a marketer of digital gear that works together," the company said.

Because its MP3 devices will be entering a crowded market, Gateway is hoping to jostle for space by adding features rarely seen in digital music players in that price range. In addition to playing music, the Gateway DMP-200 can also be used as a digital voice recorder, offering the recording and storage of up to nine hours of notes, lectures and meetings.

With a plug-and-play USB interface, the new MP3 players also let users store images and documents. Gateway said the devices would also be fitted with a 3-line indigo-blue backlight, full graphic animation and ID3 tag support.

The new device weighs 1.5 ounces and measures just 0.5-inch wide, "making it one of the thinnest MP3 players available," the company hailed.

Tuesday's announcement comes as part of a deliberate strategy by Gateway to expand beyond PC manufacturing and sales to become a broader provider of information technology products.

With quarterly revenues thinning, the company's long-term plan is to roll out 15 new consumer electronics products, four new mobile products, three new systems and networking products (including a four-way server and an external storage device), as well as about 28 new software peripherals and accessories.

The new offerings will PDAs, digital televisions, rear-projection TVs and a DVD player that can connect to a home network.