Gateway Puts Latest Intel Chip in New Desktop

Gateway will use the new “Conroe” Core 2 Duo chip from Intel to power a PC that users can configure as either a high-end desktop or a workstation, the company said Thursday.

Gateway will pitch its standard E-6610 PC to business customers and educational institutions, or add faster disks and reach a different market of architects and engineers.

That flexibility will allow Gateway to reach the 66 percent of the Windows-based, personal workstation market that uses single-processor machines, said Marc DeMars, director of desktop products for Gateway, of Irvine, Calif.

Gateway does not build multiprocessor workstations, but has found a market niche by selling Intel’s high-end 975X chipset for both workstation and desktop use, DeMars said.

That chipset is a requirement for running the Core 2 Duo chip, and provides a 2 percent or 3 percent performance jump over the previous 955X model, he said. Gateway plans to add more products in this area when Intel releases the professional version of its mid-range Q965 chipset in September.

The desktop model of the E-6610 offers 80 to 500GB of storage on SATA hard drives and an ATI graphics card, while the workstation model offers a fast-spinning 73GB SCSI hard drive and an NVidia graphics card.

Both versions use Microsoft’s Windows XP OS and Intel’s Core 2 Duo E6300 processor.

Intel launched the new chip July 27 as a replacement for its Pentium D chips. Using dual-core design and 65-nanometer architecture, it performs 40 percent faster and draws 40 percent less power, according to Intel.

Gateway is shipping the E-6610 desktop now for US$1,199 and the workstation version for $1,777.

As it prepares to report its quarterly earnings later Thursday, Gateway hopes the new PC will contribute to its trend of fast growth as it chases market leaders Dell and Hewlett-Packard.

Although Gateway ranks a distant third in U.S. PC market share, it has grown faster than all competitors for the past two quarters. Gateway grew 16.3 percent from 2005 to reach U.S. market share of 6.2 percent for the second quarter of 2006, according to Gartner. Dell has 32 percent share, and HP has 18.9 percent.

Still, Gateway faces significant challenges; it posted a net loss of $12.3 million for the first quarter, and must continue its search to replace Chief Executive Officer Wayne Inouye, who resigned in February.

By Ben Ames, IDG News Service (Boston Bureau)

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