Gateway offers finance scheme

Hardware Direct vendor looks to entice consumers.

Gateway will introduce a combined financing and internet access scheme in a move to differentiate itself in the competitive consumer PC market.

The programme, called YourWare, allows customers to buy a PC and pay for it in monthly instalments over two years. The user can then keep the PC or trade it in at its market value for an updated system. The offer includes unlimited internet access via Gateway's own internet service.

Gateway chairman and CEO Ted Waitt said in a statement: 'Today, the two major factors precluding a consumer from purchasing a PC are the up-front cost and fear of technology obsolescence.'

The deal differed from leasing, Gateway said, in that the customer immediately becomes the owner of the PC. Prices for YourWare start at $49.95 a month.

Customers will receive a 266MHz Pentium II system with 32Mb of Ram, a 2Gb hard disk, 15in screen and 56Kbps modem.

The specification is targeted at consumers. Bart Brown, Gateway's vice president of marketing, said: 'We are planning a more robust offering for businesses later this summer.'

Initially, YourWare will be offered only in the US. Brown said Gateway will launch the service internationally, country by country, with local financing partners.

Charles Smulders, a senior analyst with market researcher Dataquest, said: 'This is a way for Gateway to offer a complete solution to customers, and at the same time improve its own profitability.'

Unlike its competitors in the consumer market, Gateway is not selling a sub-$1,000 PC in the US.

Gateway will offer buyers of its Windows 98 PCs a choice between Microsoft's Internet Explorer and Netscape Communicator. As Microsoft prepares to defend in court its right to integrate Internet Explorer with Windows 98, the deal signalled the fact that the software giant has become more flexible.

Gateway was the first vendor to announce that it will ship Communicator together with Internet Explorer on Windows 98 PCs. Gateway said Microsoft agreed to a deal that allows Gateway to edit the Internet setup procedure that is built into Windows 98.

Instead of MSN as the default ISP, customers will be offered the Gateway.net internet service.