“Gateway has tapped J. Edward Coleman, a 31-year veteran of the distribution and services side of the computer business, to be its next CEO,” Michael Kanellos reports for CNET News.
Kanellos reports, “He is the fifth CEO (four permanent and one interim) in six years and, like his predecessors, will face the challenge of getting Gateway out of the budget end of the PC business. Although the company continues to ship PCs at a rapid rate, it has had difficulty churning out profit consistently.”
“Coleman will have his work cut out for him. Over the past few years, Gateway has tried a number of different strategies–getting into consumer electronics, getting rid of its stores, selling more PCs in retail, aiming for budget customers–but it has continued stumble when it comes to profits,” Kanellos reports. “The company reported a net profit during the second quarter of 2005, its first time in the black after 13 consecutive quarterly losses. It then reported profits for the next two quarters and for the the year. But so far in 2006, Gateway has lost $12.3 million in the first quarter and $7.7 million in the second quarter.”
Kanellos reports, “In August 2006, Lap Shun “John” Hui made an offer for $450 million cash to buy the group inside Gateway that sells PCs to retail stores. Gateway’s market capitalization hovered around $725 million at the time. He was rebuffed.”
Full article here.
MacDailyNews Take: Gateway is simply a victim of the PC box assembler’s race to the bottom. Dell and HP are killing Gateway.
Now, as with any new product or technology (see automobiles, televisions, etc.), the vast majority of the first wave of personal computing buyers had no idea what they were buying. Hence Microsoft’s Windows’ current market share numbers; it’s just now beginning to decline. Buyers today have or are finally starting to get a clue. PC box assemblers offering insecure, upside-down and backwards fake Macs got away with it for the first wave. They won’t be so successful in the future. The educated personal computer buyer is the enemy of Gateway, Dell, HP etc. The PC box assemblers, followed by Microsoft, are in for a world of hurt.
Related MacDailyNews articles:
Beleaguered Gateway posts Q2 $7.7 million loss on sluggish revenue growth, drop in margins – August 04, 2006
Beleaguered Gateway’s CEO resigns – February 09, 2006
Beleaguered Gateway on the ropes, Gartner says PC industry due for shakeout – August 23, 2005
Beleaguered Gateway shares plunge on weak outlook – August 16, 2005
Beleaguered Gateway announces ‘iPod Photo killer’ (with image) – October 28, 2004
Beleaguered Gateway launches ‘iMac G5 killer’ – September 21, 2004
Beleaguered Gateway to ditch consumer electronics to focus on PC box assembly – September 13, 2004
Beleaguered Gateway cuts another 1,500 jobs; has cut 22,600 jobs in last four years – April 30, 2004
Beleaguered Gateway grinds up customer and spits him out unsatisfied – April 02, 2004
Beleaguered Gateway closes all retail stores; Apple poised to open 77th outlet – April 01, 2004
Beleaguered Gateway to axe over 2,000 jobs in next few months – March 03, 2004
Beleaguered Gateway to buy eMachines; combo could be 3rd largest Wintel box assembler – January 31, 2004
Beleaguered Gateway cuts more jobs; closes Virginia manufacturing plant – September 03, 2003
Beleaguered Gateway puts on a happy face – December 16, 2002
Beleaguered Gateway desperately circling the drain – September 25, 2002