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Gateway To Acquire eMachines: Page 2 of 2

The combined entity will be the third largest PC company in the U.S., representing $4.5 billion in sales in 2003. The companies said they will take advantage of eMachines' low-cost business model, which generated $1.1 billion in sales last year. That figure represented a 40 percent jump in revenue over the previous year.

In recent months, Gateway has moved into some consumer markets. It is the leading seller of plasma TVs in the U.S., and has recently introduced a wide range of consumer products, including digital cameras, MP3 players, home-theater systems, and DVD players and recorders.

"The transaction is expected to take Gateway's branded integrator strategy and accelerate it from both a scale and efficiency standpoint, creating a company with a low cost structure. . .and maximum flexibility in its business model," the release stated.