Gateway, Inc.

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Gateway Inc.
Subsidiary
IndustryComputer hardware, software & services
FateAcquired by Acer Inc. on October 16, 2007
FoundedSeptember 5, 1985; 33 years ago (1985-09-05) (as Gateway 2000)
October 31, 1998 (1998-10-31) (as Gateway)
Sioux City, Iowa, U.S.
HeadquartersIrvine, California, U.S.
Area served
Worldwide
Key people
ProductsDesktops, laptops, servers, monitors
RevenueIncrease US$3.980 billion (2006)
Number of employees
2,000
ParentAcer Inc. (2007)
SubsidiarieseMachines (now-defunct)
Websitewww.gateway.com

Gateway Inc., previously Gateway 2000, was an American computer hardware company based in South Dakota and later California, that developed, manufactured, supported, and marketed a wide range of personal computers, computer monitors, servers, and computer accessories.

It was acquired by Acer in October 2007.[1][2]

History[edit]

Gateway logo used from 1985 to 1998.
Gateway logo used from 2002 to 2006.

Gateway was founded on September 5, 1985,[3] on a farm outside Sioux City, Iowa, by Ted Waitt and Mike Hammond.[4] Originally called Gateway 2000, it was one of the first widely successful direct-sales PC companies, utilizing a sales model copied from Dell, and playing up its Iowa roots with low-tech advertisements proclaiming "Computers from Iowa?"

Gateway 2000 was also an innovator in low-end computers with the first sub-$1,000 name-brand PC, the all-in-one Astro.[5]

Gateway built brand recognition in part by shipping computers in spotted boxes patterned after Holstein cow markings. In 1989, Gateway moved its corporate offices and production facilities to North Sioux City, South Dakota. In line with the Holstein cow mascot, Gateway opened a chain of farm-styled retail stores called Gateway Country Stores, mostly in suburban areas across the United States. It dropped the "2000" from its name on October 31, 1998.[6]

AOL acquired Gateway.net, the online component of Gateway, Inc., in October 1999 for US$800 million.[7]

To grow beyond its model of selling high-end PCs by phone, and to attract top management and engineers, Gateway relocated its base of operations to La Jolla, California, in May 1998.[8] In an effort to cut operating costs, Gateway made another move, this time to Poway, California, in October 2001. After acquiring eMachines in 2004, Gateway again relocated its corporate headquarters, to Irvine, California.[9][10][11]

In 2003, the Securities and Exchange Commission filed fraud charges against three former Gateway executives: CEO Jeff Weitzen, former chief financial officer John Todd, and former controller Robert Manza.[12] The lawsuit alleged that the executives engaged in securities violations and misled investors about the health of the company.[12] Weitzen was cleared of securities fraud in 2006, however, Todd and Manza were found liable for inflating revenue in a jury trial which concluded in March 2007.[13]

In 2002, Gateway expanded into the consumer electronics world with products that included plasma screen TVs, digital cameras, DLP projectors, wireless Internet routers, and MP3 players. While the company enjoyed some success in gaining substantial market share from traditional leaders in the space, particularly with plasma TVs and digital cameras, the limited short-term profit potential of those product lines led then-CEO Wayne Inouye to pull the company out of that segment during 2004. Gateway still acts as a retailer selling third-party electronic goods online.

Gateway resourced customer support within North America, priding itself as "100% North America-based support".[citation needed] Gateway also moved build-to-order desktop, laptop, and server manufacturing back to the United States, with the opening of its Gateway Configuration Center in Nashville, Tennessee, in September 2006. It employed 385 people in that location. By April 2007, Gateway notebook computers were produced in China and its desktops had "made in Mexico" stickers.

On October 16, 2007, Acer completed its acquisition of Gateway.[14]

Current and previous products[edit]

Previous hardware[edit]

In September 2002, Gateway entered the consumer electronics market with aggressively priced plasma TVs. At the time, Gateway's US$2,999 price for a 42" plasma TV undercut name brand competitors by thousands of dollars per unit. In 2003, the company expanded the range of plasma TVs and added digital cameras, MP3 players, and other devices. By early 2004, in terms of volume, Gateway had moved into a leadership position in the plasma TV category in the United States. However, pressure to achieve profits after the acquisition of eMachines led the company to phase Gateway-branded consumer electronics out of their product line.

See also[edit]

References[edit]

  1. ^ "Gateway computer co-founder Michael Hammond is dead at 53". CNN.com. November 4, 2015. Gateway started closing stores, sales stagnated, and the company sold itself to Taiwanese computing giant Acer for $710 million in 2007. Acer still sells a small handful of Gateway-branded PCs as part of its budget computer lineup. Hammond was born on November 28, 1961, in Des Moines, Iowa
  2. ^ "Acer Inc. - Gateway, Inc.: Completion of Merger". Acer. Business Wire.
  3. ^ "What Ever Happened To Gateway?". Starting in 1985, Gateway 2000 was the original moniker of Gateway computers. Shipped in Holstein cow markings boxes to accent the rural ...
  4. ^ "Gateway Inc. Co-Founder Mike Hammond Dies at Age 53". The New York Times. Associated Press. 2 November 2015.
  5. ^ "Hands-On - Gateway Astro". June 1, 2000. Gateway's Astro .. affordable and compact .. in a single unit
  6. ^ "Gateway: One awesome ride". Sioux City Journal. December 16, 2007.
  7. ^ "Gateway closes AOL chapter with stock buyback". CNET.
  8. ^ Crockett, Roger O. "Gateway Loses the Folksy Shtick: CEO Waitt Looks West to Lure Sophisticated Talent". BusinessWeek. Retrieved 2009-02-10.
  9. ^ "Technology Briefing, Hardware: Gateway Plans Move". New York Times. April 1, 2004. Retrieved 2007-06-12.
  10. ^ Freeman, Mike. "Gateway Inc. to leave Poway". San Diego Union-Tribune. Retrieved 2007-06-12.
  11. ^ "Gateway, Inc.: Private Company Information - Bloomberg". www.bloomberg.com. Retrieved 2017-08-23.
  12. ^ a b Kawamoto, Dawn (14 November 2003). "Former Gateway CEO, two others charged with fraud". CNET. Retrieved 28 November 2018.
  13. ^ "Ex-Gateway executives found liable in accounting fraud". Los Angeles Times. Associated Press. 9 March 2007. Retrieved 28 November 2018.
  14. ^ http://global.acer.com/about/news.asp?id=6775 About Acer – News Release] Archived 2007-09-30 at the Wayback Machine.

External links[edit]