ZDNet Suggests That Gateway Is Targeting iMac Customers

by , 12:00 PM EDT, August 20th, 2002

A ZDNet article is suggesting that Gateway is now competing with Apple in the LCD all-in-one space. The article leaves out that Gateway has until now focused mainly on king-of-the-toasters Dell, the company that has taken most of Gateway's falling market share. Gateway fell on hard times towards the end of the dot-com bust, prompting founder Ted Waitts to step back into the role of CEO for the company. Since that time, Gateway has trimmed back operations in Europe, closed many of its Gateway Country retail stores, and started a successful, new advertising campaign with a cow mascot.

According to the ZDNet article, the company will be releasing a new Wintel series of computers called the Profile 4. This series will feature an all-in-one design, with an LCD display. On the high end, the company will be featuring 17" LCDs, more RAM, and USB 2.0, while not offering DVD-R drives. Midrange models will also feature 17" LCDs, but not offer any DVD capabilities, and otherwise closely matches the mid-range iMac's specs. The low end model, priced at US$300 less than Apple's entry-level iMac, will offer similar specs, but features a CD-ROM-only drive. All of the models are hampered by relying on integrated video from Intel's 854 video chipset, substantially less capable than Apple's NVIDIA graphics card.

Both Apple and Gateway have a high profile with consumers and operate retail stores for promoting or hawking their wares. But Apple has some advantages over its PC rival.

Two of Apple's four flat-panel iMacs come with DVD recording drives--or SuperDrives--and last week the company added the technology to its $1,499 eMac, an all-in-one computer built around a cathode-ray tube (CRT) monitor. In fact, "about 50 percent of our iMac customers buy up to the SuperDrive," said Greg Joswiak, Apple's senior director of worldwide hardware product marketing.

None of the Profile 4 models come with DVD recording drives, nor does Gateway offer the technology as an upgrade, sources said.

"It's a mistake not to have the DVD rewritable drives," Duboise chided. "That's the one advantage Apple is going to hold over them. The all-in-one Profile is a multimedia-enhanced machine, and without that DVD rewritable a big piece is missing."

The design of the Profile 4 systems cannot accommodate the size of a DVD recording drive, sources said. Much could change later in the year when Pioneer Electronics releases a smaller version of its DVD-R/RW drive suitable for notebooks. That drive may have the ability to fit into Profile 4. Apple also offers the Pioneer DVD recording drive on eMac, flat-panel iMac and the Power Mac. Last week, Apple released a new version of Power Mac, the company's professional system, with twin processors ranging up to 1.25GHz.

There is more information on Gateway's pricing model, a comparison between a Gateway and a Dell model, and other related issues, in the full ZDNet article.

If ZDNet is correct about Gateway specifically targeting Apple, this would make the second Wintel company to specifically target Apple and its customers. In July, we reported on Northgate, a PC company that targets Apple customers outright in its marketing. That company is also offering an LCD-based all-in-one.

The Mac Observer Spin:

Differences of opinion will no doubt exist on whether this effort to target Apple is a reflection of the Cuertino-based company's strengths, its weaknesses, or the unassailable might of Round Rock, TX based Dell. Likely its a combination of the three, but certainly Apple wouldn't be a target of these companies if they didn't think that Apple had something that they needed, PC buying customers.

It's also interesting to look at the Profile 4 series from Gateway. The supposedly "more expensive" Mac is often criticized by many in both the Mac and PC camps, yet here we have a company targeting Apple with similar pricing points, and fewer features. Gateway is offering more RAM on its high end, but there's no FireWire, and no DVD-R drive. On the mid-range, Gateway offers the same price and a bigger screen, but no FireWire or DVD player. At the low end, Gateway has Apple's price beat by US$300, but the product has no FireWire, and only a CD-ROM drive. Certainly the low-end model is the single most competitive unit of the three of them, but even still it's hardly so.

MHz fans will argue the superiority of the Intel offerings in Gateway's models, while Mac fans will happily point out that Gateway's models are crippled by Windows XP, so that's a wash, at best. In any event, if Apple's models are so darned expensive, why is that Gateway is pricing its units at the same levels? We'll see if consumers answer that question for us.

ZDNet Article