Gateway Enters New International Markets

The company is selling its products through Tesco stores in the Czech Republic, Hungary and Slovakia, and is providing customer support through its European call center.



Gateway on Monday said it's making its products available for the first time in Eastern Europe, a step in the computer maker's strategy of moving to areas with higher growth rates than the U.S. PC market.

Gateway is selling its products through Tesco stores in the Czech Republic, Hungary and Slovakia, and is providing customer support through its European call center, the company said. Financial details were not disclosed.

The move is seen as part of Gateway's plan to seek expansion in international markets. Gateway, which saw shipments decline in the U.S. in the second quarter, recently partnered with Chinese distributor Digital China Holdings to sell computers in that country.

By entering Eastern Europe, Gateway is in a better position to compete with consumer and retail efforts by rivals Acer, Hewlett-Packard, and Dell, John Spooner, analyst for Technology Business Research, said in an e-mailed opinion. Dell also has been expanding its retail partnerships, recently signing a deal with Bic Camera to sell in Japan.

"We believe that between Gateway's Eastern European efforts and its recently established relationship with Chinese distributor Digital China Holdings, Gateway's international revenue will grow quickly and surpassing 10% of its total revenue in the second half of 2007," Spooner said. TBR also expects Gateway to seek out more retail partners with non-U.S. retailers in order to build a greater international presence.

In the second quarter, Dell and Gateway were the only two top five vendors to show a decline in PC shipments in the United States, dropping 10.7% and 7.1%, respectively, according to International Data Corp. Gateway's slide opened the door for Apple to tie the company for third place in the U.S.

Overall, the U.S. market grew 7.2% in terms of shipments in the second quarter. Dell was the leading vendor, followed by Hewlett-Packard, IDC said. Worldwide, PC shipments rose 12.5%, with HP leading the pack, followed by Dell.

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