Gateway to China for American PC maker

GATEWAY Inc, the third-largest United States maker of personal computers, will begin selling in China to boost international sales six years after it exited the Asian market.

Gateway's desktop and notebook PCs, as well as computer monitors, will be available across the country in shops such as Best Buy Co's flagship Shanghai store, the company said yesterday.

Chief Executive Officer J. Edward Coleman is expanding the company's distribution and returned to the British market last September to fuel sales growth. Personal-computer sales in China, the world's second-biggest market, may rise 22 percent to US$19 billion this year, outpacing growth in the US, according to IDC.

Gateway started a pilot program in China in June with Digital China Holdings Ltd, a PC distributor that shares the same controlling shareholder as Lenovo Group Ltd, the world's third-largest personal computer maker. Gateway withdrew from European and Asian markets in 2001 to cut costs, said Bloomberg News.

Job cuts and lower component costs helped Gateway post second-quarter profit of US$1.91 million, or one cent a share, earlier this month, compared with a loss of US$7.68 million, or two cents, a year earlier. Sales fell 8.6 percent as consumers snapped up notebook computers from rivals such as market leader Hewlett-Packard Co.

PC sales in the US, the largest market, are estimated to reach US$63 billion, unchanged from a year earlier, said Bryan Ma, a Singapore-based analyst at IDC.

Lenovo held a 36.1 percent share of China's PC shipments in the first quarter, according to Beijing-based research Analysys International. Founder Electronics Co and Tsinghua Tongfang Co were the next largest, while Hewlett-Packard Co surpassed Dell as the fourth biggest in China, Analysys said.

Legend Holdings Ltd, the controlling shareholder of Digital China, is also the largest shareholder in Lenovo, which acquired International Business Machines Corp's PC unit in 2005.