With the eMachines line, Gateway is hoping to gain market share with rock-bottom retail buyers. Although these PCs generally deliver lower margins than more expensive units, competition is fierce.

The latest salvo in this market involves offering recordable DVD drives in cheap PCs. The eMachines T2398, for instance, comes with a DVD+/-RW drive, 512MB of memory, an 80GB hard drive and an Intel Celeron D 340 (2.93 GHz) processor. It costs $499 after a $50 rebate.

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