In a move to differentiate itself in an increasingly competitive consumer PC market, Gateway is introducing a programme that combines financing and Internet access.
The programme is called Your:)Ware. It allows customers to buy a new, customised PC but pay in monthly instalments over two years. At the end of this period, the user can keep the PC, or trade it in at its market value toward the purchase of a new system. The offer includes unlimited Internet access via Gateway?s own Internet service, Gateway.net.
?Today, the two major factors precluding a consumer from purchasing a PC are the up front cost and fear of technology obsolescence," Gateway chairman and CEO Ted Waitt said in a statement. He said the new programme addresses both.
The deal differs from a leasing, Gateway said, in that the customer immediately becomes the owner of the PC. From Gateway?s perspective, the arrangement allows it to book the revenue when the PC is sold.
Prices for Your:)Ware start at $49.95 a month. For that amount, customers will receive a 266MHz Pentium II system with 32Mbytes of Ram, a 2Gbytes hard disk, 15-inch screen and 56Kbps modem, as well as unlimited Internet access.
The current offering is specifically targeted at consumers. ?We are planning a more robust offering for businesses later this summer," said Bart Brown, Gateway?s vice president of marketing.
Initially, Your:)Ware will only be offered in the US. Bart Brown said Gateway will launch the service internationally on a country by country basis, working with local financing partners.
?This is a way for Gateway to offer more of a complete solution to customers, and at the same time improve its own profitability," said Charles Smulders, a senior analyst with market researcher Dataquest. He believes adding services ? such as the financing and the Internet access - to its hardware offering will benefit the company?s bottom line.
Unlike its competitors in the consumer arena, Gateway is not selling a sub-$1,000 PC on the US market. A combination of financing and additional services, may offer the company an alternative way of luring lower income families to its systems.
?The challenge for them will be to make this seamless and effortless for the user," said Smulders.
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