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Gateway's moooving PCs
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December 5, 1996: 10:09 a.m. ET
Chairman Ted Waitt predicts strong holiday season and solid 1997
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NEW YORK (CNNfn) - Gateway 2000, the popular computer maker known for its distinctive cow-centric advertising, is looking forward to brisk sales of its PCs throughout the holiday shopping season and into next year.
Chairman Ted Waitt, who founded the Iowa-based company in a farm house outside Sioux City in 1985, said his firm has recorded record demand during the fourth quarter of 1996. U.S. consumers continue to purchase personal computers for their homes and businesses have not stopped upgrading technology in the workplace, he said.
"We're seeing record demand right now," Waitt told CNN's "Business Day." "Typically in the fourth-quarter of the year, a lot of people by computers for the home. We're seeing the benefit of that demand." (123K WAV) or (123K AIFF)
Like Gateway, other computer makers and retailers report brisk customer demand during the first week of the holiday shopping season, a period critical to annual sales. But while interest is at a record level, some analysts remain uncertain about whether inquiries will turn into sales.
Waitt said that Gateway has turned interest into sales, adding that his firm's historic success has come from selling PCs directly to consumers through a toll-free number and over the Internet. That has allowed the company to keep costs down and offer consumers the best possible value.
While retailers might argue that it's wiser to buy from a store where you can see the actual computer before you buy, a growing number of consumers prefer the savings of buying direct.
That popularity appears to have contributed directly to Gateway's bottom line. For the third quarter ending Sept. 30, the company reported that revenues jumped 35 percent to $1.2 billion. Sales during the first nine months of 1996 topped $3.48 billion -- a 43 percent gain over the previous year. And net income also rose in the first three quarters, climbing 42 percent to $162.5 million, or $2.08 per share.
Wall Street investors have certainly taken a shine to Gateway. The company's stock price has catapulted from a 52-week low of $18 per share to Wednesday's closing price at $57.63.
Waitt attributes the success to a corporate culture that places employee loyalty and customer satisfaction on a par with financial results.
"We've been fortunate to differentiate ourselves by the values of the company," he said. "We treat out customers with a little bit of respect, a little caring, a little honesty. We try to have fun out there ... We try to give them a great deal and good service."
And don't forget about the Holstein cow-patterned shipping boxes.
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Gateway 2000 home page
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