Gateway's $3k Plasma TV

Sports fans watching NFL football games this past Sunday may have noticed something unusual among the dozens of commercials: an ad for a 42" Gateway plasma television.

There's nothing odd about commercials for plasma TVs—Philips has been running them for years—but there was something very unusual about Gateway's price: $2995, before sales taxes. That price is less than half the average US retail price of similarly-sized plasma screens, about $6328, according to a recent report by CNET's Michael Kanellos.

The Gateway TV will make its official market debut on Monday, November 4, at Gateway Country stores nationwide. The product is the company's first venture into the television market since an ill-fated experiment with a multipurpose "PC TV" several years ago.

The aggressive pricing is part of a long-term plan to expand into all types of consumer electronics, according to Gateway spokesman Brad Williams. "We're taking market share and gaining revenue," he told Kanellos. "You're going to see us get into a lot of digital media products."

The profit margin on the company's 42" plasma screen must be razor-thin, given that the closest current production competing product sells for $4614, with an estimated margin of about 30%. Gateway's willingness to sacrifice profits to gain market share could work to the benefit of home theater fans with a bit of extra cash. Gateway reported losses of $50 million for the fiscal quarter ending September 30.