Gateway closing all its retail stores, eliminating 2,500 jobs

Associated Press ^ | 4-1-04

[Oldeconomybuyer]

POWAY, Calif. (AP) -- Troubled computer maker Gateway Inc. announced Thursday it will shutter all of its retail stores next week, eliminating 2,500 jobs.

The company, based in the San Diego suburb of Poway, said its 188 stores will close on April 9 and workers will be let go as the store operations wind down.

[discostu]

Too much horizontal expansion into areas where they were weak. First the stores which put them in direct competition with Circuit City and Best Buy, a competition they couldn't win because the others sold software; then they started branching into other electronics (like TVs) thus putting themselves in competition with still more retailers all of whom had better selections and more expertise.

Horizontal expansion works best when you can really leverage, which they couldn't, or when you're expanding into under populated space, which they didn't.

[hobson]

A friend of mine purchased a hign-end Gateway notebook, three months later it lost it's mind and became a boat anchor.

[Alberta's Child]

LOL. No -- I wasn't living in Alberta back then. I ordered it directly from Gateway and had it delivered.

[Viking2002]

Yeah, I'd gone into one of their outlets in Virginia a few years back - I thought it was very odd, the way they were conducting business. I guess this article proves it.

[Citizen of the Savage Nation]

Walked into one of their brand new stores in '98, bought a top of the line PII 350 for $2300. It soon became apparent that it was filled with the cheapest, no name OEM crap they could find but yet price-marked to the moon to support those B&M overhead and I had to spend another grand to replace everything because went something went wrong, I had to call in to tech support and wait forever. At least doing that, I knew what was in the computer and could keep tech support out of the loop as much as possible.

Eventually, it gave way to a custom-built top of the line Athlon system 4 years later that I put together myself, with components I picked myself, all for $1500. No need for Gateway or Dell or anyone else, really.

[teletech]

Apple stores, on the other hand, are pretty cool. Very well laid out, staffed with very knowledgeable staff, and overall a very pleasant environment.

My computer guru son bought an 17" Apple Powerbook G4 Titanium and he loves it! He runs Microsoft Virtual PC for the PC side of things and OSx 10.8.2 for the Aplle stuff. Neat laptop!

[johnfrink]

Yep. They make such a good product--I mean, it absolutely blows everything else out of the water. And it was brilliant for them to go the retail store route, because once you sit down at an iMac, and see all the cool peripherals, you don't mind paying an extra $300. The iPods are just sick--so far above the other mp3 players out there that it's pathetic.

And there is absolutely no competition between their salespeople (who, I think, are best described as incredibly polite geeks) and the people who troll the aisles at Comp USA or wherever else trying to get you to buy a PC.

Like you said, dangerous--to one's checking account!

[Paleo Conservative]

I bought a 120 MHz Pentium from them and i can't begin to count the ways i was ripped off, from the low performace motherboard (they left out the pipe-line burst cache in the memory and then tried to tell me EDO memory would make up for the increased access times),

I stopped buying from them when they shipped us a 486-66 with a virus infected hard drive.

[tiamat]

I agree.

Incredibly polite geeks. Not pushy, though.

I don't have an iPod ( yet) Waiting for when we sell the house, and then i am going to blow some SERIOUS cash!

[Paul_B]

G. is hedging their bets though. At BB they'll sell you the latest G., in the form of an eMachine (quite a decent piece of work it is, too; much prefer it to HP/Compaq).

[johnfrink]

"He runs Microsoft Virtual PC for the PC side of things and OSx 10.8.2 for the Aplle stuff."

I hope to god you mean OS X 10.2.8!

I have a 12" G4 powerbook, and love it. So small, so light, so powerful. I think Apple has made great strides in recent years in getting their prices down to the somewhat-affordable (rather than the entirely-unaffordable of a few years back), and are continuing to make products that are many degrees of coolness above the competition.

[MegaSilver]

My computer guru son bought an 17" Apple Powerbook G4 Titanium and he loves it! He runs Microsoft Virtual PC for the PC side of things and OSx 10.8.2 for the Aplle stuff. Neat laptop!

I'm sick of Windows, but I'm going to wait until the PowerBook G5 comes out this summer.

[tiamat]

LOL!

I just recongnised your screen name!

Big Simpsons fan here!

[tonyinv]

That was my first computer also..I also purchased it around the same time from the same place. That thing lasted a couple of years, I actually still have the monitor.

Cost me an arm and leg back then, mine came with 16mb ram. I remember upgrading the ram to 64 and it costing me a couple hundred bucks... technology sure has come down an incredible amount in the past 10 years.

Probably another factor in Gateway's retail failure. Look for the Apple stores to follow. They wont be able to sustain it with their market share being so little, whats it now 6%?

[sonrise57]

My first windows box was a gateway (386). Before that I had and apple ][, after gateway i had a micron, then a dell. Gateway has lousy customer service as far as i can tell.

[chilepepper]

to me, a powerbook MAC can't begin to compete with a refurbished IBM Thinkpad which costs only 30-40% as much as Apple's cheapest... particularly if the IBM is running Linux.

[Prime Choice]

That's too bad for the Gateway employees and all, but I've never heard anything but bad things about Gateway products. That's why I was seriously bummed to learn that Gateway had recently bought out eMachines (of which I have six perfectly-functioning systems).

Guess I'm back to building my own again. Thank God for the Shuttle and Antec bare-bones boxes.

[TonyM]

It was a dumb idea to begin with. And it made paying state taxes with a purchase a requirement. That was enough for me to write Gateway off.

[SamAdams76]

Compaq is no more. It's HP now. Actually HP has a pretty decent product line with the Pavillion series. I had a Compaq Presario laptop once and it was the worst computer I ever owned. I had to totally reload the operating system at least three times and I only had it for about a year. I use an IBM Thinkpad for a laptop now and it is the best computer I have ever had - including desktops.

I remember Gateway from the mid-1990s. I never owned one but I know people who did and they were happy with them. They had a chance to be where Dell is now but somebody screwed up somewhere.

[teletech]

I'm sick of Windows, but I'm going to wait until the PowerBook G5 comes out this summer.

Apple isn't cheap but they build a damn fine laptop! The Powerbook G5 should be awesome!