eMachines was a brand of low-end PCs, based in Irvine, California, focusing on the lower end of the market. eMachines employed about 135 employees and sold between 1 to 2 million computers each year before its purchase on January 30, 2004, by rival Gateway Computers. Gateway in turn was acquired by Taiwanese personal computer manufacturer Acer in October 2007, and eMachines was used as a name brand for PCs until 2012. In early 2013, eMachines ceased operations.
eMachines was founded in the United States in 1998, backed by South Korean monitor maker Korea Data Systems (KDS), Korean computer manufacturer TriGem, and various other investors. The company announced PC models at prices 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 price war involving Compaq, Hewlett-Packard (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 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, 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.
In December 2003, eMachines released the T6000 desktop, the world's first mass-marketed AMD Athlon 64-based system, retailing at US$1,150. The systems were primarily sold through Best Buy stores, but the PCs were also available online. eMachines were also the first company to sell notebooks based on the AMD Mobile Athlon 64, with the launch of its M6000 series in January 2004.
In July 2004, eMachines began to shake the perception that their computers were of poor quality when PC Magazine reported:
Among systems less than a year old, eMachines users report the fewest serious problems. eMachines' low-cost PCs are less likely to need repairs than systems from any other vendor. Whereas only 9 percent of eMachines desktops less than a year old needed repairs, according to readers, the rates of comparably new systems from Dell and Gateway needing repairs were 11 and 15 percent, respectively. Only 1 percent of all eMachines systems needed to be replaced.
eMachines was acquired by Gateway in March 2004 for $262 million in cash and stock. Under the deal, Wayne Inouye, CEO of eMachines, became CEO of Gateway, replacing founder Ted Waitt. Gateway itself was purchased by Acer in October 2007.
In June 2011 eMachines released BIOS update version 1.09 for the netbook model eM350 which, after flashing the BIOS, caused the machines to permanently stop functioning (i.e., version 1.09 "bricked"/permanently damaged any eM350 it was installed on). The failure occurred on all eM350 netbooks on which it was loaded. eMachines subsequently withdrew BIOS version 1.09 from its website.
During the 2013 Consumer Electronics Show, James Shervington (Big Nose), associate vice president of Acer announced the eMachines brand has been discontinued.