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Who bought Gateway computers?

There are two ways to look at the question of who bought Gateway computers. Who bought the company, and who bought the computers. Gateway’s computers didn’t have the best reputation, but people loved the company until they didn’t. Gateway fell hard and fast, and various turnaround efforts failed. Acer bought Gateway in 2007.

Gateway was originally known as Gateway 2000, but changed its name as the millennium approached so as not to sound dated.

What was wrong with Gateway computers?

who bought gateway computers

A 1987 ad for Gateway Computers in Computer Shopper. Image credit: Jason Scott/Flickr

Gateway computers typically used reputable name-brand parts inside, including Intel motherboards and Creative sound cards. But they were more finicky than other brands.

At my first job, when I worked on a Gateway for the first time, my elder coworker picked up the phone before he did anything else. “Always call Gateway before you do anything to one of their machines,” he advised me. “I learned that the hard way.”

To this day, I think Gateway bought parts that were slightly different and slightly cost-reduced. If you got your drivers from somewhere other than Gateway themselves, you had problems. And if you tried solutions that worked on any other machine, they didn’t necessarily work on a Gateway.

Why people loved Gateway anyway

Gateway computers drove technicians up the wall, but people loved Gateway anyway and bought their machines in droves, and got really mad at you if you ever said anything bad about the computers or the company. Gateway had a cult of personality around it, almost as intense as the ones around Apple or Amiga.

What did Gateway know that nobody else did?

Gateway was founded in Iowa in 1985 and later based in South Dakota. It had customer service centers in North America, including a call center in Kansas City that operated from 1996 to 2006. Gateway played up an image of being midwestern, rural, wholesome, and friendly. When you called to order a Gateway computer by phone, you got a friendly salesperson with a no-bull attitude. They shipped you a computer in a cow-spotted box at a low price.

And when you had a problem, you called an 800 number and got to talk to a friendly voice somewhere in the Great Plains who didn’t have to get approval from 17 managers to send you a part and walk you through how to swap it out.

It started to unravel when Gateway started asking more questions and its traditional, old-fashioned no-questions-asked experience turned into a lots-of-questions-asked experience, like support from HP and Dell. But HP and Dell computers had fewer problems.

None of this was an industry secret. The annual consumer satisfaction surveys in the two major PC magazines said the same thing about Gateway every year: Their computers were average or even below average reliability, but they had the best customer service, so the majority of their customers would buy from them again.

Having below average reliability and average customer service turned out not to be a good combination.

Reverse merger with Emachines

Gateway bought Emachines in 2004 and put its management in charge, hoping to cut costs and improve profitability. It wasn’t Emachines who bought Gateway Computers. Gateway only made it look that way, and it was partly by design. Gateway wanted Emachines’ management. But the combined company still struggled to compete against Acer, Dell, HP, and Lenovo. The experiment proved to be short lived.

Who bought Gateway Computers, the company?

Acer bought the combined company in 2007 for $710 million and it continued both brands. The price was a disappointment, as Gateway had been the subject of multi-billion-dollar merger rumors with the likes of Compaq and Dell less than a decade before. According to Forbes, Gateway lost 98.3% of its value between 2000 and 2007.

Acer shut down the Emachines brand in 2013 but continues to sell computers under the Gateway brand. While some people regard the brand as damaged goods, it retains better name recognition than Acer in many circles.

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