The Wall Street Journal Interactive Edition -- January 26, 1998
Gateway 2000 Cuts Prices,
Enters Sub-$1,000 Market
An INTERACTIVE JOURNAL News Roundup
Gateway 2000 Inc. entered the sub-$1,000 computer market Monday,
beating rival Dell Computer Corp. into the fast-growing segment.
Gateway, which sells computers it manufactures directly to consumers,
had shied away from the sub-$1,000 market. But demand for ultracheap
PCs, once considered a niche market at best, exploded early last year
as tumbling component costs allowed manufacturers to offer more power
and features for under $1,000.
Last week, Micron Electronics Inc. became the first major direct-mail
vendor to enter the fray for the $1,000 personal computer.
Micron launched a $999 Millenia SE model with a 233-megahertz MMX
Pentium chip, 16 megabytes of main memory, a 3.2 gigabyte hard-disk
drive, a two-megabyte video card, a 16x CD-ROM drive and other
standard features. A 15-inch monitor costs $200 extra.
Gateway, North Sioux City, S.D., will offer its E-1000 and E-1000N
machines, which are aimed at corporate and institutional buyer, for
under $1,000. The machines come with a 15-inch monitor, 166 MMX
Pentium processor, two-gigabyte hard drive, 16 MB of memory and an
Ethernet adapter.
Before the moves by Gateway and Micron, most direct-mail PC makers
stayed away from competing with low-cost retail models that have
broken the $1,000 barrier in the past year because the direct-mail
vendors prefer to target experienced buyers who know what they need
and are willing to spend more on their purchases.
Gateway also reduced prices up to 21% on its desktop PCs and
workstations, and upgraded the power of its Pentium II processor PC
that costs less than $2,000.
Gateway said the price cuts are effectively immediately and also apply
to its Destination Digital Media Computer.
Gateway said it also added a 266MHz Pentium II processor into its
G6-266 PC, which is priced at $1,999.
Copyright © 1998 Dow Jones & Company, Inc. All Rights Reserved.
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