For "EMachines", the SuperMac brand, see
Umax.
eMachines is a brand of low-cost PCs based in Irvine, California. eMachines employed about 135 employees and sold between 1 to 2 million computers each year before its purchase on January 30, 2004, by rival Gateway Computers. Gateway was purchased by Acer in October 2007, and eMachines is still used as a name brand for low-cost PCs.
History
The company appeared in September 1998, as a joint venture between Korean monitor maker Korea Data Systems (KDS) and Korean computer manufacturer TriGem, announcing models at price points of $299, $399, $499, and $599, all without a monitor. At the time, few PCs sold for less than $699, and $999 was a more common price point for entry-level PCs. The first units shipped in November of the same year. eMachines PCs quickly became common in retail stores and touched off a ruinous price war involving Compaq, HP, IBM, and Packard Bell. eMachines PCs were frequently offered with large rebates, provided the consumer signed a long-term contract with an internet service provider, driving down the price further.
By early 2000, eMachines was the fifth-largest seller of PCs, in terms of volume, in the world,[citation needed] and had helped drive Packard Bell and IBM, as well as several smaller value-oriented vendors, from the US retail market.[citation needed]
In March 2000, hoping to further cash in on the dot-com boom, eMachines filed an Initial Public Offering with its share price set at $9. But with thin profit margins and declining sales, the company quickly started losing money and received a threat of being delisted by NASDAQ in late December 2000. Its stock price, which had peaked at $10, had fallen as low as 14 cents. The company went private in December 2001.
Continuing price pressure from eMachines, along with Dell's aggressive pursuit of the home computer market, contributed to the merger between HP and Compaq[citation needed]. At the end of 2003, eMachines was the #3 personal computer maker in the world, in terms of sales figures, behind Dell and HP.[citation needed]
Before the company went private in 2001, eMachines' desktop components were generally considered of poor quality.[citation needed] After the private buy-out, however, eMachines began using higher quality, off-the-shelf components in its desktops.
In December 2003, eMachines released the T6000 desktop, the world's first mass-marketed AMD Athlon 64-based system, at $1,150US retail. The systems were primarily sold through Best Buy stores, but were also available online. They were also the first company to sell notebooks based on the AMD Mobile Athlon 64, with the launch of its M6000 series in January 2004.
July 2004, eMachines began to shake the perception that their computers were of poor quality when PC Magazine reported "Among systems less than a year old, eMachines users report the fewest serious problems. eMachines' low-cost PCs are less likely to need repairs than systems from any other vendor. Whereas only 9 percent of eMachines desktops less than a year old needed repairs, according to readers, the rates of comparably new systems from Dell and Gateway needing repairs were 11 and 15 percent, respectively. Only 1 percent of all eMachines systems needed to be replaced."[1]
eMachines was acquired by Gateway, Inc. in March 2004 for $262 million in cash and shares. Under the deal, Wayne Inouye, CEO of eMachines, became CEO of Gateway, replacing founder Ted Waitt. It remains a stand-alone brand that is sold through retailers, catalog and online merchandisers.
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