Accelerated Growth

1
Accelerated Growth
CONFIDENTIAL INFORMATION

• November 06, 2006

2
CONFIDENTIAL INFORMATION
Perspective on Growth
Higher value proposition to customer
30 margin
Immediately implementable for Gateway
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Perspective on Growth
CONFIDENTIAL INFORMATION
- Weve done it before... - WidowPC is at 2.5M
sales after two years of ops - Faster than
either Dell or Gateway after same time in ops -
Paul Kirchoff background - Projected growth rate
slower than Gateway or Dell
- Assumes annualized Q3 direct sales
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Rapid Growth Plan - WidowPC Stand Alone
CONFIDENTIAL INFORMATION
401
229
139
104
64
49
42
16

• 1 - Aggressive mkt/biz dev, evolve partners,
  industrial design
• 2 - Share build, unique products, affinity mkts,
  intl test
• 3 - Global expansion, adjacent market investment
• 4 - Harvest year

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Growth Activities
CONFIDENTIAL INFORMATION

• Marketing and Business Development Investments
• Dominate Industry Partnerships
• Leading PR capability / Accelerated Review
  Execution
• Increased Advertising, DM, email, Sponsorships
• Accelerate Current Guerilla Marketing -
  Sponsorships, Game Developers, WOM
• Partner Marketing
• Leading Customer Community Infrastructure
• Aggressive street fighting marketing
• Product Sophistication
• Speed, Unique ID, Peripheral Software selection
• Supply Chain
• Reach, Cost, Speed, Vendor co-op
• Financial
• Zero interest financing, Better economics with
  merchant services
• Pricing intelligence, funding for new high ROI
  projects

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Key High Margin Product Innovations
CONFIDENTIAL INFORMATION

• L33T RAM
• Investment and Resources
• 1MM
• Marketing, partnerships and inventory
• Reseller promotions
• Overhead
• Review units
• Sales/Margin
• 10MM revenue
• 2MM margin

Unique Product
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Key High Margin Product Innovations
CONFIDENTIAL INFORMATION

• Signature Liquid Cooled Gaming Systems
• Investment and Resources
• 0.3MM
• Marketing and inventory
• Supplier relationships
• Review units
• Sales/Margin
• 5MM revenue
• 2MM margin

Unique Product
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Key High Margin Product Innovations
CONFIDENTIAL INFORMATION

• World of Warcraft PC (7 million subscribers)
• Funding
• 1.5MM
• Marketing and inventory
• Reseller affiliate promotions
• Licensing Overhead
• Review units
• Sales/Margin
• 20MM revenue
• 4MM margin

Unique product Higher value proposition
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Key High Margin Product Innovations
CONFIDENTIAL INFORMATION

• High Performance Disk to Disk Backup
• Funding
• 5MM
• Marketing and inventory
• Direct mail and calls
• Direct Gateway sales
• Review/demo units
• Press tour
• Sales/Margin
• 80MM revenue
• 24MM margin

Unique product Higher value proposition
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Resources Required
CONFIDENTIAL INFORMATION

• Initial Investment
• Logistics
• Procurement
• Corporate Overhead Services
• Some IT
• Some HR
• Legal

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Key Points
CONFIDENTIAL INFORMATION

• Gateway Direct GM 16, 65 non PC products
• WidowPC high contribution to Direct margin
• Low overhead/low expenses
• WidowPC profitable RD lab Formula 1 PR team
• Proven Management
• High value proposition products
• Acquisition shows decisive action