eMachines

» see emachines.com as it lived, on the wayback machine

~ the obit ~

In 1999 a cheap computer in turkey was not a brand. It was a list of parts. You walked into a shop with a number in your head and walked out with a box somebody had assembled that afternoon, and later you posted that list in a forum signature because the parts were the whole identity. eMachines was selling the exact opposite proposition, a sealed box with a price on the front of it, in american electronics stores i have never stood inside.

It started in september 1998 as a joint venture between two asian manufacturers, Korea Data Systems and TriGem, run out of california. The first machines were the eTower 266 and 300, at 399 and 499 dollars with no monitor. That was not a discount off a normal price. It was a different category of object, sitting under what a decent monitor cost on its own. By march 1999, six months in, eMachines was the fourth largest PC seller in the united states with 9.9 percent of the market.

The company was a retail operation rather than an engineering one. It bought commodity parts and let Best Buy do the selling. In august 1999 it shipped the eOne, a colored all-in-one aimed straight at the iMac, listed at 799 dollars with a 400 dollar rebate attached to a three year CompuServe contract. That is the shape of the entire business in one product. The computer was the bait and the subscription was the meal.

~ the rap sheet ~

~ the rebate math ~

On 30 november 1999 eMachines bought Free-PC, one of Bill Gross's idealab companies, which had been giving away Compaq Presarios to anyone willing to hand over their demographic profile and live with an advertising frame permanently wrapped around the screen. The plan was 10,000 free machines. eMachines bought it and shut the giveaway down almost immediately, keeping the ad infrastructure and the free ISP.

The logic underneath survived, though, because it was the logic of the whole era. A computer was worth less than the person using it. Sign someone up for three years of dial-up at twenty dollars a month and the ISP has bought a customer for 720 dollars, so handing 400 of it back at the register is cheap. People who did that arithmetic got a working machine for very little. People who did not got a contract they could not leave.

~ the cracks ~

eMachines went public on 24 march 2000 at nine dollars a share and raised 180 million. The stock fell eight percent on the first day. The Nasdaq had peaked ten days earlier. By 2001 the shares were trading at thirty eight cents and the company was delisted, and founder Lap Shun Hui took it private again in january 2002 for 161 million dollars.

The second life was the better run one. Under Wayne Inouye it stopped chasing volume and went after retail margin instead. It turned profitable. Gateway bought it in march 2004 for stock plus thirty million in cash, then handed Inouye the chief executive job at Gateway itself. The discount brand ended up running the company that bought it.

~ the long tail ~

Acer took Gateway in october 2007 and inherited eMachines with it, which left one company holding three separate names for the same commodity hardware. eMachines carried the bottom of that range for five more years, in netbooks and in the sub-500 dollar laptops parked at the end of the aisle. On 17 january 2013 Acer said it would stop making anything with the name on it. The website stayed up for driver downloads.

Nothing in an eMachines box was invented there, so what died was not a design house. What died was a specific pitch: that a computer could be a checkout item, dropped into a cart at a price nobody had to think very hard about. That worked for exactly as long as the desktop was the thing a household went out and bought, and by 2013 the thing a household went out and bought was a phone.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »