PC manufacturers need marketing therapy Computer makers are clueless when it comes to creating excitement around their products.

By Steve Fox
Editorial director, CNET.com
(2/7/02)

The computer industry prides itself on innovation. Every month, hard drives get roomier, chips get vroomier, notebooks get lighter, and screens get brighter. Advancements have become so accelerated, in fact, that some hardware technologies have already surpassed Moore's Law, the principle that computing power doubles every 18 months.

Simply put, the computer industry doesn't have a clue.

Yet despite all this momentum, PC sales are slumping. It's easy to blame tight budgets, rising unemployment, and a general consumer realization that most old PCs pack enough power to get by. Or you could blame runaway hardware technology itself, which has outstripped users' everyday needs, threatening to turn PCs into indistinguishable commodities. Whatever the cause, computer makers are having trouble generating the kind of tingle that energizes people to open their wallets. They should be thinking about clever ways to generate excitement. I'm talking marketing here. Simply put, the computer industry doesn't have a clue.

The name game
Disagree? Perhaps you've forgotten that for years, PC Cards were called PCMCIA cards, a misbegotten mouthful if ever one existed. And what about the ponderously named IEEE 1394, the port otherwise known as FireWire? Or the promising networking standard 802.11b, soon to be replaced by equally memorable 802.11a? Non-pointy-headed types are lobbying for the moniker "Wi-Fi" instead, but so far the 802s are winning.

Even when they get the names right, few hardware companies have mastered the art of the deal. While Cathay Pacific Airways offers a "free" iPaq when you buy selected first- or business-class round-trip tickets, and automakers give away zero-percent financing with the purchase of a car, computer companies go on assuming that if they build it, customers will come. You may get the occasional rebate or bundle, but nothing jaw-dropping. (One computer company does "think different," but although Apple has succeeded in making computers seem sexy, colorful, and interesting, even brilliant marketing can't stand up to the Wintel buzz saw.)

Before you accuse me of going all Andy Rooney on you, I'm not simply indulging in a finger-wagging harrumph-fest. And after examining the latest search logs on CNET.com, I've noticed a trend: Gateway is catching some major buzz with tech-savvy audiences. Toward the end of 2001, the search term Gateway stood atop the CNET charts with the highest percentage gain for two consecutive weeks.

I've noticed a trend: Gateway is catching some major buzz with tech-savvy audiences.

There's only one reasonable explanation for this. During that period, Gateway was thinking outside the cow box, introducing the kind of clever, eye-catching promotions consumers rarely get from computer companies.

Let's get creative
The campaign started with the so-called preferred family package, which offered consumers a fully loaded, 1.5GHz Pentium 4 desktop PC, a notebook, an MP3 player, an inkjet printer, a scanner, a digital camera, wireless networking, and in-home installation. Total cost: $99 per month over a four-year period. The package itself seemed to borrow an idea popular in the auto industry. I'm not saying I like this deal. The $4,800 price seems steep, even for such a large pile of goodies. And conventional wisdom suggests hardware gets obsolete in a hurry; lock yourself into a long-term deal, and you'll still be paying off the old machine long after you've gotten a new one.

But conventional wisdom may be wrong here. Today's machines have fast-enough processors, sufficient RAM, and large-enough hard drives that you might easily squeeze four years' service from them. (The scarcest resource today is bandwidth, not processing power.) Besides, it's hard to ignore the allure of doling out small payments over time while getting the benefits on day one.

If you thought the family package was an intriguing opening, Gateway's follow-up offer, a free LCD with the purchase of a desktop PC, should close the deal. Flat-screen LCDs are the latest in tech gotta-haves, just behind digital cameras. And the package's 15-inch Gateway FPD1510 looks like one of the best low-cost LCDs around. Certainly it helped light up CNET search boxes. I've even heard of two people who bought new Gateway PCs just to get the monitor. That sounds like a successful promotion to me.

Only time will tell whether Gateway's aggressive play can help it recapture lost market share. On the product side, the company has recently released a spate of strong offerings, especially in the notebook arena, that stack up favorably against the competition. Now the trick is to get people talking about Gateway again. So far, so good.

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