
Watch in awe as executives at Gateway Computers make their company and brand disappear! Gateway Computers announced on Friday that they will be moving to a “100% Indirect Sales Model” Umm guys, have you not been paying attention? In business, generally, more distribution channels is better than fewer, especially for a product manufacturer like Gateway.
Gateway was a pioneer in the direct sale of computers back in the late 80′s and early 90′s. You called their toll-free number, told them what you wanted, gave them your credit card, and they put it together and shipped it to you. A very low-cost/high profit model.
Now, Gateway intends to do away with all of that, going to a distribution model that’s just like every other product we buy on a day to day basis. I guess this could indicate the total market saturation of computers in general. I mean there are literally dozens of players in the computer field and they all basically do the same thing: Buy components from other manufacturers (i.e motherboards, memory, video cards, hard drives, wireless cards, etc), put them together in their own, branded, case, mark it up and sell it. There’s just not a whole lot of innovation in that process.
Gateway could try to develop a new way of computing. They could develop some great new product that generates a lot of buzz (i.e. The Eee PC). They could try to expand their market share by developing new ways of making computers cheaper in general, or more energy efficient. How about Gateway trying to reestablish it’s brand by declaring itself “The greenest computer you’ll ever own”, and then developing systems that meet that standard. Surely with all of the “Global Warming” buzz, that would get someone’s attention.
But no. They decide to keep being a simple computer assembly-line and decrease their market value and exposure by removing distribution channels. Oh well. So, sadly, Gateway may be going the way of the Dodo. Sadly because I used to own a Gateway and it was actually a pretty good computer, at the time. But alas all things must come to an end. Maybe Dell will buy them out…