eMachines first caught US headlines this summer with its promise of a $399 desktop PC and a $699 iMac knock-off - today at Comdex it revealed it plans to bring those kind of prices to Europe next year.
The company?s ambitions are starting to expand, according to president and CEO Stephen Dukker, in an exclusive interview on the Comdex show floor.
eMachines is going against the grain in more ways than one: ?Our model is kind of the reverse of the local manufacture, build to order model,? explained Stephen Dukker.
Instead, the company makes masses of identical machines in Seoul and sells them to retail partners. The model appears to be working, for eMachines at least: Dukker said eMachines would sell 200,000 PCs this quarter, and hopes to move 300,000 the next.
In keeping with its lean business model, eMachines does not have its own Comdex booth. Instead, the company is showing its wares on the booth of Korean monitor maker KDS, which owns 49 per cent of eMachines. The other 51 per cent is owned by Korea?s number two PC maker, Trigem.
For the time being eMachines is keeping a sharp focus. It is aiming at the retail market and limiting itself to three price points for PCs: $399; $499; and $599.
?These are very high volume price points, and the objective is to address them with a kind of consumer electronics model,? said Dukker.
The company is not envisaging a move to direct sales, but said it will soon announce a deal with a third party that will sell its systems online.
eMachines sees two types of customers for its low priced PCs: so called ?late adopters? who are very price sensitive; and people buying a second or third PC. The latter category already buys a PC as they would a consumer electronics device, claimed Dukker.
Dukker said he expects big brand PCs to come down in price to somewhere between $499 and $599, but that eMachines will remain competitive. ?A $100 to $200 difference, that?s 20 to 40 per cent at these price points,? he said. He added that eMachines hopes to benefit from the support of retailers, who are keen to maintain an alternative to the big brands.
eMachines is working on a $699 iMac look-alike, the eStation. Mock-ups of the device were demonstrated behind closed doors at Comdex. Dukker revealed that, like the iMac, it will have translucent parts, but refused to reveal more. He did say the device will have a floppy drive, unlike the iMac, and that it can function as an audio device when the PC is powered off.
On public display at Comdex was the prototype for the eNote 333, a $2,000, 3.5 pound slimline notebook equipped with a 333MHz K6-2 processor. The notebook will come with 64Mbyte of RAM, a 4Gbyte hard drive and a 13.3 inch TFT screen.
In May 1999, eMachines plans a massive roll out of new devices. These will include the eStation, the eNote and the eMedia - being billed as a ?convergence? device. It is a set top box with a DVD player, based on a full-blown Windows 98 PC.
Next is the corporate market.
?We believe strongly in a $500 dollar corporate desktop machine,? said Dukker. He added the systems would be similar in configuration and price to the company?s current eTower systems, but would be network ready.
In the second quarter of 1999, eMachines will make its move in Europe, said Dukker. It will attempt to leverage the distribution channel of monitor maker Miro, which is also owned by KDS. eMachines intends to target the French, German, UK and Scandinavian markets initially.
eMachines does not lack ambition. ?We?ll be the number five retail PC supplier in the US this quarter. If we can be the number four by the end of next year, I think we?ll have done a pretty good job,? said Dukker. ?I think that should bring us into the top 10 worldwide,? he added.
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