Gateway: Buy Now, Upgrade Later

WHAT ARE THE BIGGEST BARRIERS to buying a personal computer? Consumers overwhelmingly say high cost and rapid obsolescence. So on May 27, Gateway 2000 proposed a solution: Consumers can buy its PCs on time with an option to upgrade when the contract ends--like leasing a car. Dell and Micron have programs for consumers to lease PCs. Compaq and IBM have them for the business market. But Gateway aims to challenge Compaq as the leading home brand. It's a battle that Gateway wants to win badly: Compaq shipped more than twice as many PCs as Gateway in the first quarter of 1998, says Dataquest.

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