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eMachines was a maker of low-cost home PCs based in Irvine, California. It employed about 135 employees and sold between 1 and 2 million computers per year, before its purchase on January 30, 2004 by rival Gateway Computers, who purchased the company in an effort to return to profitability. HistoryThe company appeared in September 1998 as a joint venture between Korean monitor maker KDS and Korean computer manufacturer TriGem, announcing models at price points of $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. In 1999, eMachines introduced the eOne, an all-in-one PC manufactured by Japan's Sotec that closely resembled Apple Computer's iMac. Apple quickly sued and the eOne was withdrawn from the market. By early 2000, eMachines was the fifth-largest seller of PCs, in terms of volume, in the world, and had driven Packard Bell and IBM, as well as several smaller value-oriented vendors, from the US retail market. 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 due to a souring economy, 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. At the end of 2003, eMachines was the #3 personal computer maker in the world, in terms of sales figures, behind Dell and HP. An eMachines M5405 Laptop.eMachines PCs historically fared poorly in service and reliability surveys conducted by PC World and PC Magazine. There have been exceptions to this however. One example is the eMachines M5405 laptop system, which received a very favorable review in November of 2004 by PC Magazine. Despite the fact that all the USB ports were on the back of the laptop, and there were no firewire ports included, the laptop still was good enough to be considered the Editors' Choice. Before the company went private in 2001, eMachines' desktop components were generally considered poor quality. However, after the private buy-out, eMachines began using good quality, though not great quality, off-the-shelf components in its desktops. As a result, hardware would last longer, and individual components could be replaced with ease. Over the past few years, eMachines desktops and laptops have come a long way in value and reliability, offering several high-end models and plenty of value for the money in today's market. In December 2003, eMachines released the T6000 desktop, the world's first mass-marketed AMD Athlon 64-based system. The systems were primarily sold through Best Buy stores, but were also available online. At $1,150US retail, the T6000 was more expensive than the average eMachines desktop, but was still incredibly affordable, given the specifications: AMD Athlon 64 3200+, 512MB RAM, 160GB hard drive, and a ATI Radeon 9600 graphics card. The T6000 sold well, but was forced into obscurity in 2004, as the AMD64 market quickly heated up and Intel's EM64T implementation was released in 2004. 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 of 2004. On January 30, 2004, Gateway announced its intent to purchase eMachines for $30 million in cash and 50 million shares of stock, valuing the deal at approximately $234.5 million. The deal called for Wayne Inouye, eMachines' CEO, to become CEO of Gateway, displacing founder Ted Waitt. See also
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