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.

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