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Short On $199 Digicam Gateway Offers Rebate On Its $299 Model

10/13/2003 02:00:00 AM Eastern

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Industry Reacts To Gateway Cams

Barely one month into its entry into the digital camera market as a branded supplier, Gateway is already "chasing stock" on its $199 4-megapixel camera and has offered a $50 rebate on its $299 5-megapixel model, said Paul Grupp, product manager, digital solutions.

The rebate offer is designed to bring a more modest price step-up between Gateway's 4-megapixel M40 at $199 and the highest priced 5-megapixel model, the T50 for $399, Grupp said.

While Gateway made "aggressive" demand forecasts for all its models, initial sales of the $199 M40 have exceeded forecasts while demand for the higher priced offerings have fallen within Gateway's expectations, Grupp said.

The computer maker-cum-CE vendor made the move into digital cameras because the category is booming and the company did well with its third-party vendors, Grupp said. Thanks to the company's "unique position" of being its own supplier and retail channel, the margins Gateway enjoys on its own digital cameras are "considerably better" than those it realizes with its third party suppliers, Grupp noted.

Gateway stocks cameras from Minolta and Canon in-store, as well as broader assortment of SKUs from Fujifilm, Hewlett-Packard, Nikon, Kodak, Olympus and Sony on its Web site.

While these vendors will all remain partnered with Gateway for now, the company is looking to realign some of its current SKUs to remove some competitive models and shore up the higher end, "big lens type" cameras that Gateway doesn't produce, Grupp said.

"It's hard to justify a competing model unless the brand or line is particularly popular with consumers, like Canon's Elph line," Grupp said.

Grupp acknowledged that supplier reaction had been "varied." [See story, right.] "Some suppliers who I thought would take it well, didn't, and those who I thought wouldn't take it well, did," he said.

Looking ahead, Gateway plans to incorporate more sophisticated technological "differentiators" in its future introductions. Grupp said to expect more than four models next year but not as wide an assortment as competing vendors since they don't have the "channel issues" that other suppliers face.

The company also plans on offering more Gateway-branded digital imaging products geared around "workflow solutions" but is staying away from offering an in-store digital printing solution, Grupp said. "We still don't understand the [in-store] printing market yet."

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