eMachines -- it's created an eMonster!

Low-cost PC maker is gobbling up market share in North America -- No. 5 and climbing -- and now it's turning out pricier models, too.
Written by John G. Spooner, Contributor
eMachines Inc. continues to gobble up market share.

The Irvine, Calif., PC maker moved up to No. 5 in North American PC sales for the first quarter of this year, according to a report by International Data Corp. to be released Monday.

eMachines, the report says, sold more than 500,000 computers, moving up from seventh place in the fourth quarter of 1999.

eMachines (eeee), which announced six new PC models on Thursday, continues to hold the price line at $399, while it also moved up-market with newer, pricier PCs, the report said.

The low-cost PC maker also received a boost when IBM Corp. (ibm) pulled out of the retail market, in a decision announced by Big Blue last year.

At any rate, eMachines is happy with its new position.

"You bet," said Steven Dukker, eMachines' president and CEO.

"Essentially Compaq and Hewlett-Packard have seriously pulled in their horns," he said. "They've pulled back in terms of low price."

HP's (hwp) and Compaq's (cpq) lowest-cost PCs are now priced at about $600. This has allowed eMachines to step in and win the lion's share of sales below that price, as the company has several models in the $400-to-$600 range.

In many cases, eMachines had the only brand-name retail PCs available for less than $600.

While $399 PCs make up a large share of its business -- 40 percent, according to IDC -- eMachines continues to move toward selling more expensive PCs under its eMonster line, introduced in the fourth quarter last year.

eMachines' newest eMonster 600, priced at $899, is aimed at gamers -- obviously not cutting-edge customers, but possibly younger ones who are looking for a less-expensive PC that provides good graphics, Dukker said.

The eMonster 600 offers a 600MHz Pentium III, 64MB of RAM, a 20GB hard drive and an Nvidia (nvda) Riva TNT2 graphics card.

While eMachines continues to focus on PCs, it also has its eye on the Internet appliance market. The company will make a Net-appliance announcement in the near future, Dukker said.

"We do intent to be very aggressive in Internet appliances," he said.

The company, which last year announced a partnership with America Online Inc. (aol) to deliver, among other things, Internet appliances, will likely announce an appliance or appliances within the next month, according to industry observers. The devices should ship shortly thereafter.

eMachines announces earnings next Thursday.

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