eMachines buy means $500 PCs for agencies

Gateway Inc.'s acquisition of eMachines Inc. could slash the government's desktop client price tag to $500 or $600, predicted Jocelyn Attal, Gateway's public-sector executive vice president.

'Gateway's average unit value in the government market is around $1,600,' she said. 'We haven't participated in government business at the low end.' The most popular government purchase is the all-in-one Profile 5 PC, she said.

EMachines, in contrast, has not pursued the government market and markets low-cost consumer systems.

The combined companies will also promote connecting large-screen monitors to networks of servers, desktops and notebook PCS, which allows dynamic messaging to user communities about fast-breaking events. Gateway sells 14- to 30-inch LCDs and 42- to 50-inch plasma displays to the government, Attal said.

The eMachines acquisition, based on 50 million shares of Gateway stock plus $30 million cash, must receive Justice Department approval. Gateway's Ted Waitt will chair both companies; eMachines' Wayne Inouye will become the chief executive officer.

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