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."
It's even funnier than that. According to the article, Acer only bought Gateway because Lenovo beat them to their first buyout target: Packard Bell!
So apparently their goal was to buy the shittiest computer company in existence, but they were stymied in that goal so they bought the second shittiest. Personally, I was surprised to see that both Packard Bell and Gateway still existed, but I guess when the CEO of Acer finds extra change in his couch cushions, he has to spend it on something.
Personally, I was surprised to see that both Packard Bell and Gateway still existed,
Packard Bell just doesn't sell in the United States anymore. They have some notebooks and some GPS devices and some USB-pen-drive-sized USB player. They got the reputation has being the crappiest computer company EVAR and were never able to quite live that down in the U.S. market.
Despite the reputation, I bought a Packard-Bell notebook in January, and I've been quite happy with it so far. But then again, it's a notebook. No try to change various parts and therefore I did not hit compatibility problems with those parts. Linux (Mepis 6.0, Mandriva 2007, Fedora Core 6) installed flawlessly on that machine too.
So maybe they've gotten better after all... just my 2c anyway.
So apparently their goal was to buy the shittiest computer company in existence, but they were stymied in that goal so they bought the second shittiest.
They did. And most people liked their moo-cow store decor. IIRC, things went into the toilet around the time they started selling systems with Windows ME installed.
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.
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.
by Anonymous Coward
on Monday August 27 2007, @01:06PM (#20374229)
From personal experience I can shed some light on that.
Gateway before then had a good reputation for customer service. lifetime service and most of the reps you'd talk to would solve your problems, period. In fact if a Gateway Tech wanted to "Nuke" a system (format/reload), they had to get permission from a senior rep who would grill you on your troubleshooting thus far, approvals were only given to cases with merit. About that time (late 2001) Gateway owned and operated most of it's own call centers.
Fast forward 6 months and one of their last call centers (actually one of their best) was being closed down in favor of outsourcers who got paid almost half of what we did. We had already experienced the aftermath of these "outsourcers", they had no real formal PC support training, worked on multiple "accounts" (not just Gatway, and not just PC support), and were having customers Format Reload as if it were the *only* troubleshooting step.
Funny thing is a good percentage of our calls those last months were people calling back because they were told to Format Reload for an issue that didn't require it (say a defective soundcard/ speakers/ etc) and thus needed *more* support. Anyway, the main thing GW had going for it was it's good customer service, but that was done away with to "cut costs"....
In retrospect, aside from getting laid off (along with 400 or so other people in the same town), Gateway used to be a great company to work for. They cared for their employees (as well as their customers). Some of the best benefits I knew of for the time, very good pay (though not extravagant), and incredibly good training. I can say that when we were laid off we were taken care of, we were all given 2 months, 3 weeks pay as a minimum severance *and* GW hired some folks for 2 months to help us hone our interviewing skills and find jobs (even hosted a job fair in the old call center).
Sorry to be posted anonymously, but that big check at the end came with an NDA.
I had (and still have, though it is my "backup" - it works, but the battery lasts about 30 seconds at this point) a Gateway laptop. I was very happy with it. While traveling, I ran into the need for a car adapter. No Problem, I thought, I can just head over to one of those new Gateway stores they're putting up everywhere and pick one up!
Nope. I find a store, ask if I can get a car adapter for my notebook, only to find out that Gateway stores don't actually carry anything, you can only order items from them. Not just power adapters (which I suppose aren't needed terribly often) - they don't stock anything. It was then that I realized Gateway was going to die - they spend all this money building stores all over the place, and then they don't even bother to stock them with a few useful items that their customers are likely to need. They basically just massively increased their costs without really offering any new or useful services. Brainy move!
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!!!
Apparently you've never been to a no-Computer store before. It wouldn't be a very good no-Computer store if it had computers there now, would it? And Gateway's no-Computer stores succeeded beyond their wildest expectations, selling record numbers of no-Computers!
It's rare that a company can conceive and execute a new strategy like this so successfully. In fact, the Gateway no-Computer stores were SO successful, they even increased the no-Computer sales on the web sales side!
Since only a few companies actually make laptops and they're basically made to order for a given brand, just find out who made your Gateway when you're looking to replace, then see who they're building for. I love my Acer laptop even though the company's support ranks below Dell (yes, below Dell! That bad!). When it dies, I'm certainly going to find out who the original guys are building for then.
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.
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 bu
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.
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.
Oh wait, were you serious? I've serviced Dell's, HP's, and Gateways. While the former aren't great comparable to a lot of home-built systems, they're usually not too terrible except for the preloaded crapware. The worst issue I've had with Dell is the seemingly-deliberate introduced incompatibilities with consumer parts (to sell you Dell parts, like a floppy drive at 2.5x normal cost). Gateways, when they blow up (and I think the only reason I don't end up fixing m
Several years ago my mother bought a Gateway, and that was when I learned to use a PC. It was a P133, with 32MB RAM and a 1.5GB hard drive, and it ran Windows 95 (go ahead and laugh, I know I do when I think about it).
More than several years ago (24 years ago to be exact) I worked on a brand new IBM XT with an Intel 8088 running at 4.77MHz, 128KB of RAM and a 10MB hard drive. It ran IBM DOS 2.1. In modern terms that would be a 0.00477 GHz processor with 0.000128GB of RAM and a 0.010GB hard drive. When I think about it I don't laugh...I cry.
Lucky, you had floppies.:P Try waiting 10 minutes to load a 16K program from cassette, just to find the volume was too low/high and you had to start over. Wish I still had the box, even if you *can* find TRS-80 emulators [discover-net.net] out there...
I gave up buying Gateway years ago. The machines were OK, but if something went wrong getting it fixed (and I was quite willing to pay) was a nightmare. Their administrators were incompetent, disinterested and I lost large amounts of time trying to get simple things done.
This can only be a good thing for customers. Gateway: RIP - at last!
Tell me about it. My work computer had the screen die, and since it was out of warranty, we had to send it in to get it replaced. Somehow in the process of fixing the screen, they managed to screw up the harddrive.
Ah yes, combining the prestige of a Taiwanese electronics OEM with the affordability and reliability of an Italian sports car manufacturer. It's a match made in heaven.
Seriously, Gateway has always made really crappy computers. Compaq and Gateway are two brands I've always gotten burned on (weird, non upgradeable components that basically mean your box is worthless after a couple of years).
Seriously, Gateway has always made really crappy computers.
I've never purchased a Gateway, but I do follow the trends in reliability, price, performance, and support from major vendors. Objectively, Gateway has not "always" made crappy computers. Instead they followed a common trend in computer manufacturing/sales. Within the first few years they made quality machines and had excellent support, both better than average for the price. Then, when they had a reputation and brand, the company executives cashed it in for quick profit by selling machines made more cheaply and poorly and counting on their reputation to get people to buy. The exact same thing happened with Alienware about a year before Dell bought them.
Sometimes at a later date a company can reverse course to some degree. Dell's laptops, for example, have gained in quality and reliability over the last few years and are no longer the cheapest junk they can assemble using whatever is inexpensive today. Usually, however, with enough customers pissed off and vowing never to buy crap from Brand X again, it makes more sense in business to simply start Brand Y and count on consumers do not do any homework or even look at consumer reports instead of the TV ad where the guy says its a good deal.
Not so. My first three computers (circa 1992, 95, and 98) were all Gateways and all excellent machines that I had very few problems with. And on the rare occasions where I had problems, their service department was top-notch. You could call and speak to someone who spoke English, was knowledgeable and friendly.
This all changed about 8-20 years ago. I'm not sure if they just lost their way, had to cut too many corners to try and compete with Dell or just got too big for their britches, but it's simply
weird, non upgradeable components that basically mean your box is worthless after a couple of years
That's true for Dells too, which has me wondering if it is true for all systems from vendors of any size.
I had a Dell desktop. The motherboard was made just for Dell. The motherboard connectors for the USB, front-panel sound, hard-disk LED, etc. were all non-standard. Instead of having separate little pinouts and wires for each one, the system used a single ribbon cable to connect all these ports and LEDs to t
Acer ranks 4th in the world with revenues around $15 billion. They are the largest vendor in Taiwan. They might shoot up to three with this purchase. Remember that Gateway just bought eMachines, which still has decent sales, and that they are in the process of buying Packard Bell, which still does a good bit in Europe.
I know for sure that Apple has billions of cash in the bank (well, liqued assets in general). How can it be that the fourth biggest by market share could easily buy the third? Has Gateway been selling machines at a loss? heh.
Under the radar of most US consumers, Packard Bell has actually become a fairly reputable manufacturer again in Europe. Last I heard they were putting out fairly good product.
The reason that Gateway and Lenovo are interested in Packard Bell is so they can capture some of the European market without having to go into it starting with nothing.
What most people don't realize is that for years Acer was one of the largest sources for COMPONENTS, not finished systems -- so they tend to weed out poor components first, resulting in better systems at the end of the assembly chain.
So [as a former Acer reseller / small business consultant who moved more into data engineering and away from hardware by choice, not necessity] I would have to say that "this figures". Why? Because I could always upgrade the Acer machines I bought/sold to my clients, and in all of the sites I ever sold to and supported I think I had one machine failure before "end of cycle", i.e., about 3 years later when the cost benefit ratio for a new machine becomes higher than the cost of maintaining an old one. Versus the Gateway, Packard Bell, or even Dell reputation for crap service.
Hmmm. I wonder if this might actually make Gateway stock worth *something* again....
This takes two companies with minimal brand equity and merges them to provide better buying power and a lower cost of goods. The fact that Gateway was worth only $710 million despite being the third-largest vendor here in the US should say something right there. And it's not good.
Market Cap of some major US PC vendors: HP 125.68B Apple 115.8B Dell 61.63B Gateway 676.29M
See an interesting trend? Gateway would be pocket change to any of those bigger companies. Basically, they died in retail, were taken over from within by E-Machines (even though Gateway bought E-Machines, the execs from E-Machines wound up in charge - just like when NeXT was bought by Apple) and stabilized just enough to turn into the company into bait for Acer.
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 valu
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.
Are they outsourcing the jobs?
and
I hear a lot of Gateway bashing here. It's understandable, but 8 years ago I bought a gateway. It FINALLY died about 2 weeks ago. This computer handled being on almost everyday, over 150 linux installs a few windows installs and has NEVER been cleaned out with a vacuum or anything. It's dirty as hell and I'm affraid to open it to fix the damn thing. I primarily used this computer for 2 things;
1) Testing all the latest linux distros
2) Downloading my pr0n, warez and music.
I think it would still work if I popped another hard drive in. So all in all I had an AMAZING Gateway experience. I wouldn't buy another pre-made PC now that I use laptops and build my own PCs. I needed the Gateway for school at the time and didn't have the time to build my own.
Customers? (Score:5, Funny)
Gateway has customers?!
Re:Customers? (Score:5, Funny)
So apparently their goal was to buy the shittiest computer company in existence, but they were stymied in that goal so they bought the second shittiest. Personally, I was surprised to see that both Packard Bell and Gateway still existed, but I guess when the CEO of Acer finds extra change in his couch cushions, he has to spend it on something.
Parent
Re: (Score:2, Interesting)
Re: (Score:3, Informative)
So maybe they've gotten better after all... just my 2c anyway.
Re:Customers? (Score:4, Funny)
Parent
Re:Customers? (Score:5, Insightful)
Parent
Re: (Score:3, Funny)
So apparently their goal was to buy the shittiest computer company in existence, but they were stymied in that goal so they bought the second shittiest.
They bought themselves?!?!?!
Re: (Score:2)
They did. And most people liked their moo-cow store decor. IIRC, things went into the toilet around the time they started selling systems with Windows ME installed.
Coincidence, bad karma or unfortunate timing?
Re:Customers? (Score:5, Insightful)
-jcr
Parent
Re: (Score:3, Insightful)
Re:Customers? (Score:5, Interesting)
Gateway before then had a good reputation for customer service. lifetime service and most of the reps you'd talk to would solve your problems, period. In fact if a Gateway Tech wanted to "Nuke" a system (format/reload), they had to get permission from a senior rep who would grill you on your troubleshooting thus far, approvals were only given to cases with merit. About that time (late 2001) Gateway owned and operated most of it's own call centers.
Fast forward 6 months and one of their last call centers (actually one of their best) was being closed down in favor of outsourcers who got paid almost half of what we did. We had already experienced the aftermath of these "outsourcers", they had no real formal PC support training, worked on multiple "accounts" (not just Gatway, and not just PC support), and were having customers Format Reload as if it were the *only* troubleshooting step.
Funny thing is a good percentage of our calls those last months were people calling back because they were told to Format Reload for an issue that didn't require it (say a defective soundcard/ speakers/ etc) and thus needed *more* support. Anyway, the main thing GW had going for it was it's good customer service, but that was done away with to "cut costs"....
In retrospect, aside from getting laid off (along with 400 or so other people in the same town), Gateway used to be a great company to work for. They cared for their employees (as well as their customers). Some of the best benefits I knew of for the time, very good pay (though not extravagant), and incredibly good training. I can say that when we were laid off we were taken care of, we were all given 2 months, 3 weeks pay as a minimum severance *and* GW hired some folks for 2 months to help us hone our interviewing skills and find jobs (even hosted a job fair in the old call center).
Sorry to be posted anonymously, but that big check at the end came with an NDA.
Parent
Re: (Score:3, Funny)
This is nice, it's like Slashdot only happy and sweet.
Re:Customers? (Score:5, Interesting)
Nope. I find a store, ask if I can get a car adapter for my notebook, only to find out that Gateway stores don't actually carry anything, you can only order items from them. Not just power adapters (which I suppose aren't needed terribly often) - they don't stock anything. It was then that I realized Gateway was going to die - they spend all this money building stores all over the place, and then they don't even bother to stock them with a few useful items that their customers are likely to need. They basically just massively increased their costs without really offering any new or useful services. Brainy move!
I do still like that laptop, though.
Parent
Re:Customers? (Score:5, Insightful)
Parent
What? This was perfect execution! (Score:3, Funny)
And Gateway's no-Computer stores succeeded beyond their wildest expectations, selling record numbers of no-Computers!
It's rare that a company can conceive and execute a new strategy like this so successfully. In fact, the Gateway no-Computer stores were SO successful, they even increased the no-Computer sales on the web sales side!
By buying Gateway, Acer is hopin
Re: (Score:3, Insightful)
Re: (Score:3)
How do you find out who the actual manufacturer is and who they are building for now?
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Re: (Score:3, Insightful)
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 bu
Re:Customers? (Score:5, Insightful)
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.
Parent
Re: (Score:2)
But then again I got a PDA in 2004 that was faster than my last Gateway computer. Guess they haven't been good for a while.
Re: (Score:2, Insightful)
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.
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two wrongs don't make a right (Score:3, Funny)
Re: (Score:2)
Oh wait, were you serious? I've serviced Dell's, HP's, and Gateways. While the former aren't great comparable to a lot of home-built systems, they're usually not too terrible except for the preloaded crapware. The worst issue I've had with Dell is the seemingly-deliberate introduced incompatibilities with consumer parts (to sell you Dell parts, like a floppy drive at 2.5x normal cost). Gateways, when they blow up (and I think the only reason I don't end up fixing m
Re: (Score:3, Funny)
-jcr
Re:two wrongs don't make a right (Score:4, Funny)
More than several years ago (24 years ago to be exact) I worked on a brand new IBM XT with an Intel 8088 running at 4.77MHz, 128KB of RAM and a 10MB hard drive. It ran IBM DOS 2.1. In modern terms that would be a 0.00477 GHz processor with 0.000128GB of RAM and a 0.010GB hard drive. When I think about it I don't laugh...I cry.
Parent
Re: (Score:3, Interesting)
Lucky, you had floppies.
Re: (Score:3, Funny)
Gateway after sales service sucks (Score:2)
This can only be a good thing for customers. Gateway: RIP - at last!
Re: (Score:2)
Re:Gateway after sales service sucks (Score:5, Funny)
Ah yes, combining the prestige of a Taiwanese electronics OEM with the affordability and reliability of an Italian sports car manufacturer. It's a match made in heaven.
Parent
..and nothing of value was lost... (Score:3, Interesting)
Re:..and nothing of value was lost... (Score:5, Informative)
I've never purchased a Gateway, but I do follow the trends in reliability, price, performance, and support from major vendors. Objectively, Gateway has not "always" made crappy computers. Instead they followed a common trend in computer manufacturing/sales. Within the first few years they made quality machines and had excellent support, both better than average for the price. Then, when they had a reputation and brand, the company executives cashed it in for quick profit by selling machines made more cheaply and poorly and counting on their reputation to get people to buy. The exact same thing happened with Alienware about a year before Dell bought them.
Sometimes at a later date a company can reverse course to some degree. Dell's laptops, for example, have gained in quality and reliability over the last few years and are no longer the cheapest junk they can assemble using whatever is inexpensive today. Usually, however, with enough customers pissed off and vowing never to buy crap from Brand X again, it makes more sense in business to simply start Brand Y and count on consumers do not do any homework or even look at consumer reports instead of the TV ad where the guy says its a good deal.
Parent
Re: (Score:2)
This all changed about 8-20 years ago. I'm not sure if they just lost their way, had to cut too many corners to try and compete with Dell or just got too big for their britches, but it's simply
Re: (Score:3, Interesting)
That's true for Dells too, which has me wondering if it is true for all systems from vendors of any size.
I had a Dell desktop. The motherboard was made just for Dell. The motherboard connectors for the USB, front-panel sound, hard-disk LED, etc. were all non-standard. Instead of having separate little pinouts and wires for each one, the system used a single ribbon cable to connect all these ports and LEDs to t
Acer buying anything? (Score:2, Insightful)
#4 in the world (Score:2)
emachines (Score:2)
$710 Million (Score:2)
Wonderful news (Score:3, Funny)
Re: (Score:2)
Re:Wonderful news (Score:5, Informative)
The reason that Gateway and Lenovo are interested in Packard Bell is so they can capture some of the European market without having to go into it starting with nothing.
Parent
As a former Acer reseller (Score:4, Informative)
So [as a former Acer reseller / small business consultant who moved more into data engineering and away from hardware by choice, not necessity] I would have to say that "this figures". Why? Because I could always upgrade the Acer machines I bought/sold to my clients, and in all of the sites I ever sold to and supported I think I had one machine failure before "end of cycle", i.e., about 3 years later when the cost benefit ratio for a new machine becomes higher than the cost of maintaining an old one. Versus the Gateway, Packard Bell, or even Dell reputation for crap service.
Hmmm. I wonder if this might actually make Gateway stock worth *something* again....
Re: (Score:2)
They do make reasonably good and damn cheap notebooks. My notebook, when I actually use it, is an Acer.
Dinosaurs mating... (Score:5, Interesting)
Market Cap of some major US PC vendors:
HP 125.68B
Apple 115.8B
Dell 61.63B
Gateway 676.29M
See an interesting trend? Gateway would be pocket change to any of those bigger companies. Basically, they died in retail, were taken over from within by E-Machines (even though Gateway bought E-Machines, the execs from E-Machines wound up in charge - just like when NeXT was bought by Apple) and stabilized just enough to turn into the company into bait for Acer.
Goodbye, Gateway...
Re:Juding by your figures, Apple looks real good.. (Score:3, Insightful)
Re: (Score:3, Insightful)
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.
2 things (Score:4, Interesting)
Unfortunately, people have seen this before w/ IBM (Score:2)