Gateway Enters Networking Fray With Own Branded Line

The move comes as last week Gateway announced plans to close all of its 188 retail stores this week and lay off 2,500 employees, approximately 40 percent of its workforce.

Gateway will launch a series 7000 line of wireless access points that have a feature set comparable to rival offerings from Cisco Systems and Proxim but are priced roughly equivalent to offerings from D-Link Systems and Linksys, said Chad McDonald, manager for networking products at Gateway, Poway, Calif.

>> Gateway's line is priced to allow it to compete against rivals bundling networking, server sales.

Standard features include support for two LAN ports, WDS bridging and repeating, AES encryption, multiple SSIDs over a virtual network and an embedded Radius Server. Pricing for an 802.11g model is $299; the 802.11a g model is $399.

Similarly, Gateway's new line of 7200 and 7400 series unmanaged switches and 7600 series of managed switches are priced to allow Gateway to compete more effectively against rivals such as Dell that are bundling network equipment with server sales. For that reason, McDonald said it was necessary for Gateway to build its own line of networking equipment rather than continuing to source product through network equipment manufacturers.

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"A lot of times if we sourced networking equipment through someone like Cisco, we were pricing ourselves out of competitive bids," he said.

Gateway plans to later offer aggressively priced bundles of products that span network, server and storage offerings, he said.

In general, solution providers are cautious when vendors enter new markets.

"My concern is, if they don't have initial success, what's going to happen?" said Richard Westerman, president of Westerman and Associates, Houston. "On the one side, I'm happy to see Gateway do this, and maybe they will be successful. On the other hand, I'm really skeptical that they will stay in business and provide anything new."

Pricing for the unmanaged 7200 series, which supports 10/100 Ethernet, and the 7400 series, which supports 1 Gigabit Ethernet, ranges from $80 to $399. The managed 7600 series, which supports 10/100 Ethernet, ranges from $399 to $2,999. A 7800 series of managed switches, which supports 1 Gigabit Ethernet, will be out this summer, McDonald said.

MARIE LINGBLOM contributed to this story.