Gateway ditches direct sales model, goes purely indirect

Gateway, long known for its (once) very active direct sales model, is continuing to morph as it attempts to revitalize itself. The most recent strategic change is pretty remarkable -- the outfit is completely and thoroughly ditching the aforesaid direct sales model. From here on out, prospective customers will only be able to snag a Gateway PC from retailers, e-tailers and other channel partners. According to the official verbiage, the change will deliver "significant cost savings, ultimately resulting in an improved value proposition for consumers." This all seems to have quite a bit to do with the recent Acer acquisition, with Mark Hill, Acer Group US General Manager, stating that Gateway is "shifting its distribution method to better align with Acer's successful global strategy, which was built upon an indirect model." At this point, we suppose it can't hurt to give it a whirl.

[Via Electronista, image courtesy of The New York Times]

[hiko36 @ Jul 25th 2008 8:01PM]

There used to be a Gateway store in my hometown. I think it was turned into a Chili's last year...

[GatgetMan @ Jul 26th 2008 12:24AM]

Homeless people would use the old Empty Gateway building to keep warm... That's when they were still in business...

[loosely_coupled @ Jul 26th 2008 1:02AM]

Yeah, I used to LOVE gateway [2000]! All my first computers were from them. I visited a gateway store on vacation outside of Los Angeles way back in grade school. They totally had Apple beat on that concept! Too bad they didn't have the right marketing.

What happened? How did Dell and HP beat them so badly?

[GatgetMan @ Jul 26th 2008 4:05PM]

"How did [they] beat them so badly?"

Price... Apples to Apples the Gateway systems were a good $400 more...

[Maeztro @ Jul 25th 2008 8:07PM]

Years ago I was an Amiga user. As the Amiga software section at the computer store got smaller and smaller until I think it was just one box they rotated around I decided to dive in to the 486 land. Went to the local gateway store and bought a 486 with monitor from them. Left the store with just a coffee mug and went home and waited for my cow boxes to arrive! No web tracking in those days either...

Oh, and gas was like $1.50.

[Reader @ Jul 26th 2008 12:35AM]

Treason! We all know that gas used to be over 10 dollars a gallon until we were saved by our current administration.

[Matt Ferens @ Jul 26th 2008 2:14AM]

hahaha

[Ignatius @ Jul 25th 2008 8:09PM]

CONGRATULATIONS! Now that you've accomplished the one thing you were destined to do in life, you can go eat bullet soup!

[icepop4who @ Jul 25th 2008 8:20PM]

ahh that sucks. Even though you can get a gateway at a bestbuy or some other retailers, you can still get one at a gateway store or gateway.com. Personally, I like manufacture who sells their own products rather than having retailers to do all the heavy lifting. HP, Sony, Toshiba, and many other makers sell their own products, so why is gateway changing? I guess the "value" branding has something to do with it.

[icepop4who @ Jul 25th 2008 8:20PM]

you suck so much

[thedesolate1 @ Jul 25th 2008 8:22PM]

Its like 4 years too late....

[Justin @ Jul 25th 2008 8:28PM]

Hooray for lower profit margins!

[JeffM @ Jul 26th 2008 3:29AM]

Hmmm... seems likely that gross margins will suffer- but depending on how well this model works for them profit margins could actually rise after they ditch the expense of the direct sales staff and other administrative overhead.

I'm sure that would have to be what the executives are betting on.

[Loy Bond @ Jul 25th 2008 8:31PM]

Global strategy? Gateway has no presence in Canada, Western Europe or Japan. The rest of the world buys like 3 computers.

[daniel @ Jul 25th 2008 8:42PM]

gateway pcs are available in western europe, the uk at least, they did drop out of the market for a while and when they came back i think about 2 years ago it was all indirect sales,theyre only sold in toys r' us and tesco- its like our equivalent of wal-mart,

the first pc my family had was a gateway, back in the gateway2000 days

[Bryce @ Jul 26th 2008 1:17AM]

There was an Australian division of Gateway, but they went bust.

[chefgon_ign @ Jul 25th 2008 8:31PM]

If I recall correctly, Gateway was the first major manufacturer to introduce the online built-to-order model and that was what made them popular in the first place. This is the end of an era, I suppose.

[Michael Scrip @ Jul 25th 2008 9:55PM]

Yep... and Dell was pretty big into online ordering too. Now, both Gateway and Dell are sold in Best Buy and Wal-mart!

It's truly a different era now.

[redgar @ Jul 25th 2008 8:37PM]

Their market share has moved downward in line with the less frequent appearances of Ted Waitt's creepy pony tail.

[SDB1 @ Jul 25th 2008 8:49PM]

When your product is hot and you can't keep up with demand you sell direct and reap higher profits! When demand is low you create a distribution network that has to purchase your product which makes up for consumer demand. Basically the retailers get shafted because they'll have to purchase a ton of product and then discount it when it doesn't sell!

[Knives_Out @ Jul 25th 2008 8:51PM]

R.I.P. Gateway ..

[wako @ Jul 25th 2008 9:01PM]

I can attest that gateway is THE shittiest computer company ever (of course the shittiest company ever is Comcast). I have had better experience with Dell. YES I said that, DELL! Where people complain where Dell falls in their machines and customer service, Gateway falls further!

Recently my monitor broke down, after FIVE WEEKS waiting for the replacement they sent me a BROKEN and USED condition monitor. Mind you this monitor did not last me more than six months. As I call back to complain and plead for another replacement that is preferably actually in REFURBISHED CONDITION, they want me to send it back for repairs! AFTER FIVE MONTHS?! Dont even think corporate can do anything or the BBB (thats how I got ahold of corporate). All corporate can do is put you on the phone with a nicer person who probably is being injected with dopamine so their happy all the time but will continue to read the same retarded policy the first person would on their regular support line.

If you think Im just complaining about my monitor, I have also had a laptop which have put me through the paces a year ago.

I am NOT surprised they are cutting back from direct sales. I will not be surprised when they finally go bankrupt either. Gateway has fallen so much from what it use to be from the 90s. They use to have the best customer service and support. Now they are.... well, trash....

[GatgetMan @ Jul 26th 2008 4:08PM]

Well, clearly based on your ONE experience, Gateway MUST be THE absolute WORST EVER!

That's why Dell and HP are in the top spots, because YOU have never had a bad experience with them....


Glad you came here to help us all out...

[chefgon_ign @ Jul 27th 2008 2:18PM]

I remember about 7 or 8 years ago a friend of mine had a Gateway and he called the customer service line for help with a hardware issue, and they told him that he had to reformat his computer with the restore discs before they would listen to his problem because they don't support computers that have had additional software installed.

I thought that was pretty funny.

[pam @ Sep 18th 2008 1:14PM]

Who did you contact at corporate? I am in the middle of a Gateway nightmare and would like to contact anyone and everyone.

[CELLGUY030 @ Jul 25th 2008 11:04PM]

back in the day they had a huge facility in sioux city ia/north sioux sd area and was a major employer for the area. steadily over the years they have cut and cut that operation to the point it was only phone sales and tech support. i will be surprised if they keep the tech area there now. that has pretty much killed the job market and vitality of the area. too bad, metro used to be so proud of gateway...

[GatgetMan @ Jul 26th 2008 12:22AM]

You've reached the peak of your existence.... 2nd place.... wow.

[kg @ Jul 26th 2008 12:34AM]

"is continuing to morph as it attempts to revitalize itself"... WOW after 10 years of revitalization the Gateway brand continues to die.

GATEWAY = FAIL

have a nice day :)

[bwah @ Jul 26th 2008 12:35AM]

Dude, your getting a Gateway. Oh wait. Dude, your getting a Toshiba. Nope, that's not it either. Dude, you're getting a Lenovo. Uhh, somethings wrong here. Dude, you're getting screwed. Yeah, that's it. Dude. Get a Mac.

[okayokay @ Jul 26th 2008 1:19AM]

what is that ilife crap? Buy a mac and each year join the thousands of drones that anticipate what the wizard will offer the cronies as software during the "Do you want new software? can't hear you.....do you reeeeeally want new software? Want to know what's in the box- its this year's new software...ha, ha" Expo.

[Goten_king @ Jul 26th 2008 4:02AM]

I remember the old Gateway country stores... fun stuff actually, you could try out new tech, and see how they all ran doing stuff... But those days are long gone...

I had a gateway from 2000?ish... lasted well into 2004/5. Now i have a 3GHz Pentium 4 model which still runs damn well. The only problem i've had is that the old monitor died about 2 years ago, which considering how old it was... isn't half bad.

Today, gateway is pretty much your cheapest solution to quality hardware. Its cheaper than dell and HP, but higher quality than emachines. They have many great concepts and ideas, i just hope people latch on and explore all gateway really has. I am dissapointed that Acer owns them now as i was never fond of acer's products, but gateway still seems strong in my eyes.

[B.C. @ Jul 26th 2008 7:57AM]

Did they purposely choose the fattest people they could find for that photo, or are now trying to be more representative of the average american?

Maybe if Gateway built slushy machines into their desktops they could corner the fat slug corner of the market.

[icepop4who @ Jul 26th 2008 8:26AM]

That's a huge market share, the fat slug corner. In fact, that's half the nation.

50% of Americans are overweight or obese.

[Squid7085 @ Jul 26th 2008 1:43PM]

The city that my Uncle lives in had a Gateway Store, it closed and a few months later it opened up as an Apple Store. Lol. I think Gateways next step is ditching sales all together. I have a hard time believing they are doing too well. Two years ago they lost their largest corporate buyer to Dell My school district. :-)

[Karen @ Sep 10th 2008 5:08AM]

I took my daughter's Gateway laptop to my local repair shop and was told they could not return laptops to Gateway for repair anymore as they had gone bust?! I haven't seen a Gateway laptop on sale anywhere in the UK the last year. I can't find anything on the web to support this. Comments anyone? :)