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Maybe Gateway's arrival will end direct foot-dragging

Maybe Gateway's arrival will end direct foot-dragging

Considering what a pain the big PC vendors have with their distribution channels around here (all you PC vendors out there who haven't sued a distributor at least once for non-payment, please raise your hand ... see what I mean?), you'd think they'd be trying to beat each other to the punch to go direct.

Instead, everybody's timidly playing wait-and-see, and letting Dell corner the direct market. Expect some of them to start reconsidering their strategy of blind-leading-the-blind sluggishness in June.

That's when Gateway (formerly known as Gateway 2000), the other big direct PC vendor, plans to start selling PCs in Asia.

Even as we speak William Cheng, a former AST Research manager in Hong Kong who now serves as Gateway's Hong Kong general manager, is scouting around for office space in Hong Kong. Cheng has been working out of the Advanced Logic Research office in Kwun Tong for several months now (Gateway, you'll recall, acquired ALR last year), but it seems it's time to get into some higher-profile digs.

Aside from a handful of old ALR hangers-on, Cheng is actually the only Gateway employee in Hong Kong at the moment. He says he's looking for five or six sales people to man the local office.

Cheng left AST last August because he wanted to pursue other opportunities. He saw better prospects with Gateway. He's convinced the direct model is the way to go in the PC business, even though 80 per cent of the PCs sold here still slosh through channels. One wonders if the AST folks had seen that particular light a couple of years ago, whether they might still be around today. But that's beside the point.

If all goes according to plan, over the next few months you'll be able to call toll-free to Malaysia and order your PCs built the way you like 'em -- just as you can now with Dell.

Gateway has a 180,000 square foot manufacturing facility in Malacca that's been open for two years, churning out 6000 PCs a day for Japan, Australia and South Asia.

According to Cheng, there's still plenty of capacity to take care of Hong Kong as of June, and China beginning early next year.

The Malacca plant builds PCs and notebooks; servers still come out of the former ALR facility in the US. Once the volume warrants it, Malacca is likely to build servers as well, Cheng says.

Anyway, Cheng appears to be the only former AST type to join Gateway 2000's management team in Asia. The three others, interestingly enough, all came from Dell: Robert Chu, the Kuala Lumpur-based regional managing director; Niall O'Reilly, the director of marketing who's also in KL; and Peter Quinlan, the regional finance and business development director who's operating out of Singapore.

Unfortunately, these former Dell managers haven't made much progress in getting Gateway to where Dell is in terms of allowing customers to order PCs from a Web site, and they apparently still have their work cut out for them. According to Cheng, Gateway hasn't even gotten that far yet in the US, although it's in the process of making it happen. It will eventually happen in Hong Kong as well, Cheng says, but there's no telling when. If they have any sense at all, they'll make it happen here sooner rather than later. As it is, when friends and acquaintances ask me what kind of PC to get and where to get it, I tend to recommend Dell because the price is right and it's so convenient to order from their Web site.

It sure would be nice to be able to recommend some alternative brands that offer Web-based direct ordering and a secure payment mechanism. The timidity is stupefying.

But at least in a couple of months there'll be a choice of vendors in Asia to phone toll-free for a custom-built PC with an attractive price tag. Let's hope the rest of the PC industry is watching.


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