Gateway's Attempt at Differentiation

| About: Gateway Inc. (GTW)

From Gateway Inc.'s conference call last night (excerpt from the transcript); interim CEO Rick Snyder is answering questions from analysts:

Bret Blackwell - Scotia McLeod

I have been a shareholder here for a couple of years, and thinking about the Company going forward, I am just thinking in terms of the position that a company like Apple has in the marketplace and people wanting to buy because of the unique design and that type of thing. Where, in an increasingly commoditized market, does Gateway see themselves so that clients want to come in and actually buy a Gateway computer? Have you guys given that any thought?

Rick Snyder

Yes. We have given it a lot of thought, and we're actually excited about the opportunity that sits in the marketplace. There are two central things that are relevant to the external world. There are a couple of things we're doing internally. It's somewhat of a list I mentioned that I went through when I talked about our messaging.

First of all I think there's an opportunity for us to give outstanding customer experience to people. I think you look at the PC industry of the last few years, I don't think it's been a great experience for customers in the marketplace. I think it's only gotten worse by the amount of press you've seen on this topic in the way people feel about things.

If you look at the legacy of Gateway, at points in time, Gateway was the best in this industry at customer satisfaction. We're really focused. We have a lot of initiatives to get us back on that path. That includes the Gateway Configuration Center, the Best Practices Tech Support Center. We're working hard on making these things happen. We've taken near-term actions. We've actually, at the request of our customers after listening to what they had to say, we've moved all of our support back to North America already for the North American marketplace. So we're working hard on being the best. That will take some time, but we're going to get there.

The second thing is value-focused innovative products. Again, that's a legacy that we know how to do well. We have executed well. It's really not just having the hottest product in terms of being the most techie product, but having products that are really innovative that have the right inflection point, that sell well.

A couple of great illustrations, the convertible notebook we had in the past. The 21-inch wide monitor, we have been highly successful with in the marketplace. Our 19-wide is doing well right now. I think you're going to see an institutionalization of coming up with products of that quality and that design over the next few years.

So we're working hard to put those two things in place in terms of outstanding customer satisfaction and innovative, focused products. Those two things will really let us stand out and be able to go back after this marketplace, hopefully take market share from people and achieve some profitable growth.

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