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Was Gateway down to selling just 1,500 PCs a week in the UK?

Do the sums

Gateway's departure form the UK and Ireland doesn't seem to have come as much of a surprise to its UK competitors.

This is probably because it doesn't seem to have been selling more than 1,500 PCs and notebooks a week in the UK.

The US PC vendor arrived in the UK in 1993 and made a big noise with the benefit of some very beneficial Office pricing from Microsoft which the local players couldn't compete with. Complaints were made to Europe, but as is the way with these things, by the time the complaint was getting anywhere the outcome didn't matter.

But since then it hasn't been a mighty stroll to market domination. Basically because Dell has hammered it at every turn and Gateway has been unable to differentiate itself.

In the top 10 UK and Western Europe PC and notebook rankings, compiled by Gartner, Gateway doesn't even figure. This means that in Q2 in the UK it had less than 2.9 per cent of the market - which is less than 34,000 PCs. In Europe it had less than 1.5 per cent - less than 89,000 PCs.

But how much less? Gateway wasn't in the top 10 for either region last year either and the company admitted its European sales collapsed by 46 per cent in Q2. Which was a terrible loss of market share, considering that UK PC shipments fell only 8 per cent in the first half of the year and that European sales to consumers (Gateway's key market) have fallen 15 per cent.

To not be in the UK top 10 in Q2 2000 it must have had less than 3 per cent of the 1.18 million units sold. To be out of the European top 10 it must have had less than 1.8 per cent of the 6.02 million PCs shipped. If we assume it dropped 46 per cent in both regions from Q2 2000 to Q2 2001 it means it had 1.62 per cent of the UK market - which is 20,642 PCs, and 0.97 per cent of Europe - 61,051 PCs.

These figures represent sales of 1,588 PCs a week in the UK and 4,696 across Europe. Which isn't great if you're a big US player. And these figures assume it was neck and neck with the 10th placed vendor. It may well have been doing worse.

To put it in perspective Dell had 19 per cent of the UK market in Q2 and 11.4 per cent of Western Europe.

Gateway's approach to selling PCs was a mix of Dell style off-the-page trading, shops and concessions within BT, Argos and Debenhams stores, and corporate business fulfilled by Computacenter.

Here's what some of the competition thinks about Gateway's departure. Strangely, Dell was too coy to gloat in public but we know they must have been whooping it up in private. ®

Richard Austin, MD "I'm not going to do a whole lot of crying over it

"They made a huge impact when they arrived - they certainly rocked the boat. They came in with a fantastic price/performance offer.

But since we've barely seen them "

Tahir Mohsan, boss of Time Computers "We were not surprised - it had been rumoured for 6-9 months. Their sales infrastructure was very poor

"They were just not a strong enough brand to sell to consumers, and in the corporate market Dell was far too strong a brand for them.

"BT and Debenhams didn't work for them. Argos isn't going to work either, because they're going."

Demetre Cheras, marketing director at HiGrade "They've been quiet for a long time. We could see it failing

Dell in the UK is extremely dominant - nobody can compete. It's a numbers game and if you don't have the numbers you're out. Dell was the cause of their downfall How can you match their prices if you don't have the numbers?"

John Hendrick, marketing manager, Mesh "We kind of expected to see some overall reductions in the market, but it's a little surprising it being Gateway."

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