Gateway Pushing 56-inch Rear-Projection TV

While Gateway’s personal computer market share continues
to slide and the company has mounting financial losses, it continues to make
a push into the high-end consumer electronics market with the rollout of a
new big-screen television model.

On Thursday, Gateway said its new rear-projection television not only
contains a 56-inch screen, but is nearly a third thinner than most of the
similar-sized products on the market.

Gateway said the new big-screen TV will retail for $3,799 and it marks the
company’s push into non-PC products. The company said its rear projection
model is less than 19-inches in depth and will ship starting November 13.

As the margins on both consumer and business computers become slimmer,
Gateway and other computer manufacturers are diversifying into new products
which aim to punch up profits.

Gateway is already marketing plasma TVs and liquid-crystal display
televisions, and the company is banking these, along with the new
rear-projection models, will serve as the principal monitor for the home
networks of the future.

But while Gateway and other computer manufacturers like Dell want a slice of the high-end consumer electronics market, they also must compete with Sony , Toshiba, Samsung and several other international
electronics companies.

Gateway’s new 56-inch rear-projection TV utilizes digital light processing (DLP)
technology developed by Texas Instruments . The DLP
technology use an array of mirrors that reflect light in a more efficient
manner, and thus, projecting an impressively clean image.

“Generating stunning HDTV pictures, it’s perfect for consumers who want a
big HDTV monitor without the limited viewing angle and bulky design of
standard rear-projection TVs,” Gateway said in a press release.

“Gateway has become a leader in home entertainment in less than a year.
After launching its first thin television in November 2002, Gateway became
the top U.S. seller of plasma screen TVs. The company offers a full line of
thin TVs — ten LCD, plasma and rear-projection models ranging from
13-inches to 56-inches,” Gateway said.

Gateway said its new rear-projection model can serve as the centerpiece of a
home theater system offering connections to a variety of external devices,
including DVI-based DVD players, HDTV tuners, gaming modules and VCRs.

Gateway also said the new model has “DCDi by Faroudja provides advanced
picture management with the highest quality Faroudja(TM) video processing
for cinema-quality video from multiple sources including DVD, VCR and

“The new rear projection TV comes with a Gateway OFR-1 Universal Remote
Control that can manage up to 8 devices and a separate remote for
controlling the picture-in-picture function and side-by-side viewing
options,” Gateway said.

Gateway’s emphasis on high-end televisions comes as the company continues to
lose market share to both Dell and Hewlett-Packard .

According to Gartner’s latest PC market figures, while total PC shipments
grew by 19 percent in the latest quarter, Gateway’s market share fell to 3.4
percent, compared to a year ago, when it had 5.5 percent of the market.

In addition to high-end televisions, Gateway has also added digital cameras
and MP3 players to its product mix. While the company is pushing into new
consumer electronics markets, Gateway’s third quarter sales fell by 21
percent to $883 million from $1.12 billion in the same quarter a year ago.

But perhaps the biggest concern is Gateway’s recent forecast for the fourth
quarter, normally its best quarter of the year, when the company said it
expects to report a loss before restructuring charges of between 9 and 15
cents a share.

Gateway has said it also expects restructuring expenses of close to $60
million in the fourth quarter and expects revenues to fall as much as 15
percent compared with the same period a year ago.

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