SAN DIEGO -- Nearly 15 years ago, Ted Waitt co-founded Gateway in an Iowa farmhouse, personally selling, building and shipping personal computers in the now-famous cowhide-designed boxes to customers around the world.
On Wednesday, he made a move that some analysts view as going out to pasture.Waitt, 36, gave up his title as chief executive officer to president Jeff Weitzen, but vows to remain active as chairman of the board.
"I've been trying to do this for years," Waitt laughed. "It was the right move at the right time."
Waitt will continue to help shape the strategic direction of the company, but starting Jan. 1, Weitzen will control the day-to-day operations.
"Jeff's appointment to CEO is really just a formalization of the roles we've had for the past couple of years," Waitt said. "He's worked extremely hard in preparing Gateway for the next century, and he has built a management team capable of executing our goals."
Ashok Kumar, an analyst with US Bancorp Piper Jaffray, said Waitt didn't have a good team of people under him until Weitzen joined the company and built a solid management base.
"He finally feels comfortable enough to leave his baby, if you will, to these guys," Kumar said. "He can now focus on other things that are important to him, like his family and his philanthropic foundation."
Kumar said Wall Street likes Waitt, a primary reason why it's important that Waitt "continue as the visionary as the company builds on its customer franchise, expands internationally and increases its breadth of product."
Weitzen, who joined the company in January 1998, will retain the title of president. Before Gateway, Weitzen spent 18 years at AT&T, most recently as executive vice president of the $24 billion Business Markets Division.
Under Weitzen's leadership, Gateway has transformed from a personal computer hardware manufacturer to providing other products and services, including a partnership with America Online that provides Internet access with the purchase of most Gateway PCs.
Weitzen, 43, also oversaw sharp growth in the Gateway Country store retail chain, which helped the company in the third quarter of 1999 boost its non-system income to 15 percent. The company expects that number to double by the end of next year.
Waitt said the computer industry is going through rapid changes -- converging with communications, Internet and super electronics businesses -- and Gateway had to reinvent itself to survive.
"When you get a convergence of multiple industries, you can't just offer hardware and PCs," Weitzen added. "We've repositioned the company so that those changes are more of an opportunity to Gateway than a threat."
There may be trouble on the horizon, especially with a possible computer chip shortage that could affect Christmas sales, Weitzen conceded.
"There are a lot of very big selling days left," he said, noting there have not yet been any delays on deliveries. "We're hopeful and cautiously optimistic."
Gateway, which went public in 1993, moved its headquarters to San Diego a year ago. The company has 19,300 employees and earned $346 million on $7.5 billion in sales last year.