Gateway Computers

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

~ the last words ~

gateway was a us-retail-only brand at the cow-box layer. you bought one through the mail or you bought one at a country store in a midwestern mall. neither of those purchase paths reached turkey. when i first saw a gateway machine in person it was at a metu lab around 2004, somebody had carried in their parents' desktop from the states. the case still had the holstein-cow shipping markings printed on the inside of the cardboard, that was the giveaway. the machine itself was running windows xp on a pentium 4.

gateway was founded on september 5 1985 by ted waitt and mike hammond in a farmhouse outside sioux city, iowa. the original company name was the gateway 2000 group, the 2000 was a forward-looking marketing flourish. the first products were add-on peripherals for texas instruments tipc computers. by 1987 the company was assembling and shipping complete pcs through magazine ads in computer shopper, every shipment came in a box printed with black-and-white cow spots that referenced the iowa-dairyland brand identity.

the nineties were the run. gateway shipped one and a quarter billion dollars in revenue in 1992 and over six and a half billion by 1997. the mail-order model was a price-and-customization advantage at a time when most consumer pcs came pre-configured from compaq or ibm. you called an 800 number, you spec-ed a machine with the cpu and ram and storage you wanted, you paid by check or credit card, the cow box arrived in two weeks. the company moved its headquarters from sioux city to north sioux city in 1990, then to san diego in 1998 in a push to recruit silicon-valley engineering talent.

the gateway country stores were the parallel retail experiment. starting in 1996 the company opened around three hundred fifty mall-adjacent retail outposts across the us, decorated in holstein cow prints and red barn imagery. you could not actually carry a pc out of the store, the location took your order and gateway shipped from the assembly plant. by 2001 the country stores were losing about a million dollars a week and most were closed in the 2003-2004 retraction. the san diego headquarters absorbed the losses, the company never recovered the late-nineties margin profile.

~ the record ~

~ the early days ~

the cow boxes were the most-recognizable shipping mark in nineties pc retail. ted waitt had grown up on a farm and the holstein-print packaging was a deliberate iowa-pride gesture that turned into the dominant brand asset of the decade. ad campaigns featured the boxes themselves, the company's mascot was a cartoon cow named gateway-the-cow-or-something. the pc inside the box was a beige tower roughly identical to any other consumer pentium box of the era, the differentiator was the price and the configurability.

the model worked because the late-nineties pc buyer wanted to choose components and gateway let them. dell was running the same play on the corporate side. compaq and ibm were selling pre-configured machines through retail channels with higher margins. gateway captured the segment between those two: a consumer who wanted to spec the machine but did not want to build it themselves. by 1997 the company was the third-largest pc maker in the us by units sold.

~ how it actually ended ~

the early 2000s pc market commoditized faster than gateway could adapt. dell's direct-to-business model was eating the corporate market. hp's acquisition of compaq in 2002 consolidated the consumer-retail tier. the country stores experiment had locked gateway into a high-fixed-cost retail footprint at exactly the moment when retail was losing share to direct online sales. ted waitt stepped down as ceo in january 2005, replaced by wayne inouye who had been running emachines.

gateway acquired emachines in march 2004 for two hundred ninety million dollars. that brought the low-cost line in-house but also brought emachines' margin profile, which was even thinner than gateway's. by 2007 the company was a takeover target. acer acquired gateway on october 16 2007 for seven hundred ten million dollars. the san diego operation was wound down. acer kept the gateway brand on us-only low-cost retail product through the late 2000s, the cow-print packaging was retired immediately.

~ what it became ~

the brand had a long dormant tail. acer continued shipping gateway-branded laptops at walmart and best buy through about 2014. that line was effectively the end of the brand as a meaningful pc identity. acer licensed the gateway name back to a us retailer (currently bmorn group) in 2020 for a separate line of budget chromebooks and tablets sold at walmart. those products carry the gateway logo but are not designed or assembled by the original company or by acer.

the original sioux city farmhouse where ted waitt set up the assembly line in 1985 is gone. the san diego headquarters building was sold in 2008 and is now occupied by a different tenant. the country store locations were repurposed as starbucks or t-mobile or whatever filled mall retail space in 2005. the cow boxes themselves still surface on ebay as collectibles, mostly sold by people who kept the empty packaging because the print was distinctive enough to mark as a relic when the pc inside became obsolete.

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