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Acer to Acquire Gateway for $710 million
downix writes "On the way into work today, I heard about Acer buying Gateway. A bold move strategically, I wonder what consequences this will have for Gateway's employees and customers. As the purchase price was at $1.90 per share, those of us that purchased Gateway shares a few years ago are reminded just how far it has fallen."
Amazing. Considering the Acers I've used, it's shocking that they're still around, let alone capable of buying another company!
Remove the cheapest competitors from the market and the average profit per unit increases.
Deleted
Their stores were what killed them. They spent a pile of money and put stores up everywhere, with little to no thought about whether any given location made sense or not. Apple's retail operation is a textbook case on how to do it right. Gateway's is a textbook case on how to botch it.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
I remember back in the early 90s when Gateway was a "rebel" clone company against the IBM PC's. They were the underdog with mail order customizable computers and fair prices. Unless my memory fails me.
Then after a little success, in come the greedy execs that try to go for the lowest denominator in quality that can still pass for functional; now it's trash years later. Where do the execs go? They find another company to ruin.
What killed them was when the owner/founder of the company handing the reins over to a IBM manager/friend. This friend convinced him that he knew exactly how to run a large business and ended turning it into a large corporate bureaucracy. At that point it became a company of bean counters( customer service agents who would hang up on the customer after 12 minutes), management cronies and corporate meetings to play the blame game.
Their stores were what killed them. They spent a pile of money and put stores up everywhere, with little to no thought about whether any given location made sense or not.
It had to do with the fact that suddenly they had retail stores that still required you to do mail order to get the stuff *and* you now had to pay sales-tax!
How that made any sense I'll never know. Back then, the reason for going to the mail order places was to avoid sales tax. Yeah, you took a hit on shipping but you got a near custom built machine (if you so desired) for less or the same price as an in-store brand before sales tax.
Once they had you paying both shipping and sales tax for a third rate computer dumbed down to below consumer level, it wasn't worth it anymore.
not having any ACTUAL COMPUTERS at the stores was the downfall I think. They had a lot of things like the Apple store, classes, training, but no repair, upgrade or hardware sales! It would seem to defeat the purpose of putting all the cool computers out there only to tell you to order it and wait 2 weeks for shipping. I also find my local "screwdriver" shop does this to. The point of being a computer store it to walk in and buy stuff!!! If you can't do that one simple thing, then I might as well go to BigBox where I can take home a crappy computer and take home the parts to upgrade it myself!!!
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
Things went to shit WAY earlier than that.
As early as 1997, they were known by computer support at my university as "Rapeway."
They had built a reputation for quality and service, but then decided to abandon both and ride that reputation into the ground, selling inferior, unreliable hardware at the prices their name commanded them before their fall.
Packard Bell did this, albeit with a stolen pseudo-reputation (along the lines of Rockwood or Kenford). Compaq did it. HP seems to be in the process of doing it, and Dell is flirting with it. The Big Three US automakers did it. It's a decades-long, proud tradition of failure.
Don't forget that having a local presence made all Gateway purchases subject to both state and local sales taxes. This gave them a final cost disadvantage when compared to Dell that didn't have such tax requirements.
These comments are my own and do not necessarily reflect the views or opinions of my employer or colleagues...
Remember, though - part of what builds stock value is the perceived upside of the company business. Apple is strong because even though their market share is small, their growth is higher than most and they dominate the music player biz and have been expanding with success whenever they go (iPhone, anyone?). HP is driven by their printer business and their services besides PC, and Dell has volume and low costs. Gateway, though, has nothing unique. So analysts look at them and say "meh" - ergo a low valuation despite the sales numbers.
The market is a funny place.
-- Josh Turiel
"2. Do not eat iPod Shuffle."
I remember when working at the Gateway store, we all got the calls they were shutting down the stores, on April first. It was one of those "great" april fools jokes, that was real. I also remember how much trouble I got for repairing a motherboard with bad capactors by just replacing them with new ones. apparently no one knew how to use a soldering iron.
SimonTek
A few NeXT alumni that either are or were Apple executives:
Avie Tevanian - Past Senior VP of Software Engineering, primary architect of Mac OS X/NeXTstep
Bertrand Serlet - Senior VP of Software Engineering, Avie's successor
Sina Tamaddon - VP of Applications
Jon Rubinstein - former VP of hardware development
Basically, when Steve took over within a short time virtually all the Apple folks who Steve didn't want around were sent packing and replaced by NeXT folks. They pretty much took over Apple from within.
-- Josh Turiel
"2. Do not eat iPod Shuffle."
My first computer was a Gateway with a 180 mhz Pentium Pro running Windows 95. That was some serious muscle in the day. Because I kept screwing around with various software I had to call tech support fairly often but back then they all spoke English and when the call was over my computer was working again. Once my RAM went bad and they replaced it without question. That's why my second computer and the one I'm still using is also a Gateway.
Does God treat us as servants or friends? Check my homepage.