Beleaguered Gateway gets new CEO (5th CEO in 6 years)

“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

16 Comments

  1. A lot of PC users have machines that are all gunked up, they don’t know what to do. Buy a $400 cheapie replacement PC, pay someone to fix their current machine or ?

    While I like the current Apple advertising I wish they would be more direct and hard hitting with Macs as alternatives to buying another Windows powered machine.

  2. I wouldn’t be suprised if we see some of the bigger linux companies start selling their own machines in a few years. Apple are showing that controlling the whole widget works. The ideal situation would be a lot of companies making their own machines with their own operating systems or variants on linux using open formats which will work on any machine. Then we can just take our pick as to what device we use. Companies like Dell, HP and Gateway can’t innovate with software because they’re reliant on the crap Microsoft gives them. If they innovated on design then they’d still be selling Microsoft crap but in a nice box. As such they have to be cheaper and that means sacrifices on design of the hardware both aesthetically and in build quality.

  3. “like his predecessors, will face the challenge of getting Gateway out of the budget end of the PC business.”

    What the hell are they going to do?…innovate new technologies and design completely new user experiences….that kind of thinking is nowhere to be found in the Gateway DNA. The whole company is based on cheap comodity boxes…and that will seal their fate.

  4. On the idea of the advertising, do you think they could do one of the new series where the PC has a sexy monitor but then the monitor goes over and works with the mac too?

    And how about an ad showing monitor sizes. The PC could get Vern Troyer to be his monitor and the Mac could have two of the asian that plays basketball — showing how a new Mac Pro supports two 30″ monitors.

  5. I’d say it again.

    Apple will pass Gateway in market share. Gateway and their cute cows are going be acquired or be out of biz within 5 years. Their products are commodities with 0 innovation, low market share, and suffer from Windowsitis.

  6. They are a bunch of fscking sales bozos. Somebody needs to tell these formerly bragging business Samurai what the short sword is meant for. But first, in their last will and testaments, they should bequeath the little belly slitters to Michael Dell and his cohorts. They will be needing that “final solution” to all of their problems in a few years.

  7. The ideal situation would be a lot of companies making their own machines with their own operating systems…

    What, you want to go back to the days of the Apple II, Commodore 64, Texas Instruments, and Radio Shack? No thanks. Standardizing on one operating system was a great idea. We just standardized on the wrong one.

    …or variants on linux using open formats which will work on any machine.

    Much better idea! And seeing how OS X is UNIX-standardized already, it would work for Apple.

    (LOL at Napster ad next to the editing box!)

  8. iSteve:

    Vern Troyer & Yao Ming have already appeared in Apple commercials – side by side – several years ago. It was an ad when the 12″ & 17″ PowerBooks were introduced. They are sitting next to each other on an airliner. After they take off and the captain lets them unfasten seat belts, Troyer pulls out a 17″ and Yao pulls out a 12″ PB.

    So it is unlikely they will appear again, let alone together in the same ad.

    Spankin Monkey:
    ‘”5th CEO in 6 years” – That’s almost like how many versions of OS X has been put out.’

    Except OS X has been getting more amazing with every generation. Unlike Gateway CEOs.

  9. We’ve tried to warn them about the dangers of using gateway drugs. Before you know it, these poor saps will be mainlining Aero and freaking out. Their resistance will be so low that e-mail attachments will infect their minds and turn PC users into babbling zombies droning on about cheap Viagra, Nigerian political prisoners with millions of dollars, and Photoshop for $10.

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