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Gateway quits online sales

Gateway quits online sales

Gateway will no longer be selling computers directly to its customers.

The company, a wholly owned subsidiary of Acer Inc., will no longer sell PCs online through its Web site. Customers will have to buy them through retail channels, like Best Buy, Circuit City and Costco.

"We are shifting Gateway's distribution method to better align with Acer's successful global strategy, which was built upon an indirect model," said Mark Hill, a general manager at Acer Group U.S. in a statement. "As the only top-tier PC company without a competing U.S. direct sales force, our commitment to the channel is unparalleled in the industry."

Dan Olds, an analyst at the Gabriel Consulting Group, said the move could be a positive and a negative for Gateway's consumers.

As Gateway competes head-to-head against other vendors for space on the shelves of major retailers, the company may be pushed to lower its prices to compete for market and mind share, Olds added. However, consumers may no longer be able to special order special configurations like they would have from a vendor selling directly,

Acer announced almost a year ago that it was going to acquire Gateway Inc. in a deal worth US$710 million. J.T. Wang, Acer's chairman, called the move the biggest acquisition in Acer's 30-year history.

Olds noted that Acer's PCs are aimed mainly at business users, while Gateway is going after consumers. "It's a decent strategy that might pay off," he added.

Acer has been holding steady in the number three spot on analysts' lists of the top PC makers. Research from iSuppli Corp. announced last month that Acer, which shipped 6.8 million units? in the first quarter, came behind only Hewlett-Packard Co. and Dell Inc. Acer had a market share of 9.7%.

Gateway noted that its PC are available at Best Buy, Circuit City, CompUSA, Costco, HSN, Newegg, Tiger Direct, Office Depot, OfficeMax and Wal-Mart.


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