Gateway to Launch Laptop Series

The new Gateway will launch a complete line of notebook PCs as one of many steps to revitalize its business after merging with Acer, an Acer executive said Friday.

"Gateway's problem in the U.S. is that it mainly sells desktops, but the notebook is the fastest growing segment," said Gianfranco Lanci, president of Acer, during the company's third quarter investors conference in Taipei.

New Gateway laptop PCs could be out as early as the first quarter of next year. Lanci said that no changes to Gateway's product lineup will be visible until then because it takes at least one quarter to discuss new products with retailers and distributors.

Acquiring Gateway will raise Acer's share of the U.S. market to 11.7 percent, the company believes, and will give it a strong brand presence.

Already, the company expects synergies from the acquisition to pan out better than previous forecasts. Acer predicts cost savings will reach US$200 million, higher than a previous estimate of $150 million, and even the revised figure could be raised again, executives said.

A large portion of that savings will come from volume discounts from component suppliers. "When we have asked component suppliers for volume discounts, so far we have not encountered a single rejection," said Lanci.

The cost of restructuring the Gateway business and integrating it into Acer is likely to be $30 million, Lanci said. The integration will likely be completed by March 2008, he said.

The strategy of the new company will be to sell products under the Acer, Gateway and eMachines brands. Once a deal to buy Europe's Packard Bell is completed, it will add that name to the list as well. The PC industry has changed, said Lanci. It has become a commodity business and in a commodity business it's better to sell products using multiple brands, not a single brand as in the PC industry of 10 years ago.

"We're going to run two brands in most regions plus maybe another that we use for special things," he said.

Acer announced a plan to buy Gateway for $710 million in cash in August, and completed the deal last week. The company has nearly completed a deal to buy Packard Bell of Europe, as well.