Gateway makes first foray into China

The computer maker will sell its PCs through Digital China, while Dell tries to target upscale consumers in the country.

Gateway will finally start to sell PCs in China this summer while Dell will try to target upscale consumers in the country.

Gateway, which is still one of the largest PC makers in the United States, will sell its PCs through Digital China, according to representatives from Digital China and Gateway. Digital China has formed a team to handle the Gateway deal and start selling the company's PCs in August.

International sales have always been a sore point for the Irvine, Calif.-based PC maker. Back in the go-go late 1990s, Gateway laid out plans to expand into several countries. The tech market imploded and Gateway retrenched. This will be Gateway's first foray into China, a Gateway spokesman said.

It won't be easy. China has its own PC brands, and most of the multinational vendors are already there. The country also boasts a large number of "white box" manufacturers and dealers specializing in bargain PCs. Although China remains one of the fastest-growing PC markets in the world, many local consumers are very cost-conscious.

Meanwhile, Dell is expected to launch fashion PCs in China later this summer, targeting the growing number of well-heeled shoppers in Shanghai and Beijing, according to sources quoted in the local media. Dell currently has two separate brands of high-end PCs. It makes Alienware PCs, mostly for gamers, and sells the XPS line under the Dell brand. The XPS line is already available in China.

China is a developing country, but in downtown Beijing brands like Burberry, Mercedes and Ritz Carlton are tough to miss. Dell spokespersons in the United States, as of press time, did not return calls for comment.

Dell has historically been one of the more successful foreign PC makers in China, but the growth in sales has slumped with the overall slowdown at Dell. Dell could not be reached for comment.

Multinational PC makers often bundle in software with the sale of computers, which helps put a dent in piracy. Still, software piracy remains rampant and computer dealers sell various versions of Windows for a little more than US$1.

Wang Dan of ZDNet China reported from Beijing. CNET's Michael Kanellos contributed to this report.