Gateway plays early bird with laptops

As companies prepare new units for the back-to-school buying season Gateway will be the first one out of the gate on Monday when it launches two new notebook PCs.

Gateway will be jumping ahead of the curve on Monday when it launches two new notebook PCs.

The San Diego-based PC company will introduce an ultraportable laptop weighing less than 3 pounds and a consumer model with a US$999 starting price. The notebooks will be the first pair among many from other PC makers in the next couple of weeks, as companies prepare new units for the back-to-school buying season.

"The back-to-school season will be key for Gateway and (these new notebooks) will help to boost demand of portables, which remain a growth area for the company and the industry," said IDC analyst Alan Promisel.

Sleek ultraportables make up about 15 percent of the notebooks shipped in the industry, Gateway product manager Ray Sawall said. "Right now, they make up about 10 percent of our notebook mix because they have been traditionally targeted at enterprise users," he said. "But as they come down in price, we're seeing more consumers buying ultraportables." Gateway's new Solo 3450 will start at US$2,199.

Sawall added that advanced features in the magnesium-encased Solo 3450, such as 192MB of system memory, a 12.1-inch active-matrix display, a 0.96-inch-thick case, an IEEE 1394 port and a 750MHz Pentium III processor, will likely attract consumers looking for more than just a thin notebook. The Solo 3450 also comes with a 2-pound multimedia dock that connects to the bottom of the notebook and adds two module slots for the CD-ROM and floppy drives. DVD-ROM and CD-RW drives are available as options.

But Promisel warned that competitors with similar high-end features are right around the corner. Gateway is among the first of the major manufacturers to offer 192MB of memory as standard on high-end models, but others are likely to match them later this month. Memory prices have fallen precipitously this year.

Prices for notebooks for students and small to medium-sized businesses are also dropping and have bottomed out around US$1,000. Gateway's Solo 1200 will cost US$999 and will include an 800MHz Celeron processor, 128MB of system memory, a 10GB hard drive, a 12.1-inch active-matrix display and an integrated modem.

The Solo 1200 will also be available with integrated 802.11b networking capability and 192MB of memory for US$1,199. Gateway is planning a 90-day wireless trial with 802.11b networking companies, such as MobileStar, which will allow Solo 1200 owners to try out the wireless networking capabilities, such as e-mail and Web access, in coffee shops and airport terminals.

Other PC makers are expected to offer notebooks with new features, such as Intel's upcoming high-performance, low-power Tualatin processor, in the coming weeks as they gear up for the second half of the year. The Tualatin launch is set for July 30, when Gateway and others are expected to announce new portables supporting the chip.

Sawall said the Solo 3450 did not include the Tualatin chip because a low-power version is not yet available. The Solo 1200 is focused on a low price, so it did not include the Tualatin processor.

The third and fourth quarters, which include the back-to-school season as well as the holidays, traditionally are the strongest time of year for PC sales. The latter half of the year will be especially significant this year as manufacturers look for a bright spot in what has been a brutal year for PC makers. IDC estimates that U.S. PC shipments are down 8.1 percent this year compared with last year, but the results are not as bad as some had predicted.

"It's not worse than previously projected," said Loren Loverde, director of IDC's Worldwide PC Tracker service. "What that indicates is that the decline is not going to be deeper and longer than we were previously looking at."

One area that has been a bright spot is portables, where there has been slight growth.

In an earnings conference call with analysts Thursday, Gateway chief executive Ted Waitt indicated that portables as well as the small-business and education markets showed signs of positive growth compared with the second quarter of last year.