Gateway was founded on September 5, 1985, on a farm outside Sioux City, Iowa, by Ted Waitt and Mike Hammond. Originally called Gateway 2000, it was one of the first widely successful direct-sales PC companies, utilizing a sales model copied from Dell. Gateway 2000 was also an innovator in low-end computers with the first sub-$1,000 name-brand PC, the all-in-one Astro. Gateway built brand recognition in part by shipping computers in spotted boxes patterned after Holstein cow markings. In 1989, Gateway moved its corporate offices and production facilities to North Sioux City, South Dakota. In line with the Holstein cow mascot, Gateway opened a chain of farm-styled retail stores called Gateway Country Stores, mostly in suburban areas across the United States. It dropped the "2000" from its name on October 31, 1998. AOL acquired Gateway.net, the online component of Gateway, Inc., in October 1999 for US$800 million. To grow beyond its model of selling high-end PCs by phone, and to attract top management and engineers, Gateway relocated its base of operations to La Jolla, California, in May 1998. In an effort to cut operating costs, Gateway made another move, this time to Poway, California, in October 2001. After acquiring eMachines in 2004, Gateway again relocated its corporate headquarters, to Irvine, California. In 2003, the Securities and Exchange Commission filed fraud charges against three former Gateway executives: CEO Jeff Weitzen, former chief financial officerJohn Todd, and former controller Robert Manza. The lawsuit alleged that the executives engaged in securities violations and misled investors about the health of the company. Weitzen was cleared of securities fraud in 2006; however, Todd and Manza were found liable for inflating revenue in a jury trial which concluded in March 2007. In 2002, Gateway expanded into the consumer electronics world with products that included plasma screen TVs, digital cameras, DLP projectors, wireless Internet routers, and MP3 players. While the company enjoyed some success in gaining substantial market share from traditional leaders in the space, particularly with plasma TVs and digital cameras, the limited short-term profit potential of those product lines led then-CEO Wayne Inouye to pull the company out of that segment during 2004. Gateway still acts as a retailer selling third-party electronic goods online. Gateway moved build-to-order desktop, laptop, and server manufacturing back to the United States, with the opening of its Gateway Configuration Center in Nashville, Tennessee, in September 2006. It employed 385 people in that location. By April 2007, Gateway notebook computers were produced in China and its desktops had "made in Mexico" stickers. On October 16, 2007, Acer completed its acquisition of Gateway.
Current and previous products
Previous hardware
In September 2002, Gateway entered the consumer electronics market with aggressively priced plasma TVs. At the time, Gateway's US$2,999 price for a 42" plasma TV undercut name-brand competitors by thousands of dollars per unit. In 2003, the company expanded the range of plasma TVs and added digital cameras, MP3 players, and other devices. By early 2004, in terms of volume, Gateway had moved into a leadership position in the plasma TV category in the United States. However, the pressure to achieve profits after the acquisition of eMachines led the company to phase Gateway-branded consumer electronics out of their product line.
eMachines
eMachines was a 1998-founded brand of low-end personal computers. It was acquired by Gateway, Inc. in 2004; the latter in turn was acquired by Acer Inc. in 2007. The eMachines brand was discontinued in 2013.
