FOR IMMEDIATE RELEASE

Gateway 2000 launches Intel^® Pentium^® II Processor technology across core desktop and Destination^TM PC/TV systems

Newest processors and other advanced technologies now available in a wide range of systems at popular pricepoints

North Sioux City, S.D., May 7, 1997 - Gateway 2000, Inc. (NYSE: GTW), one of the world's leading direct marketers of personal computers, today announced immediate availability of a wide range of desktop systems powered by Intel's new Pentium^® II processor technology. The company is now offering systems with both 233MHz and 266MHz Pentium II processors in a number of different configurations, with pricepoints starting at $2499.

"Gateway's exciting line of Pentium II processor-based systems provides customers with a whole new level of system performance. We are pleased to continue our strong support of Intel products and will immediately make this processor an integral part of our desktop product line. We anticipate the Pentium II processor will quickly emerge as the processor of choice for a large percentage of our customers," said Ted Waitt, Gateway's Chairman and CEO. "In the first few hours, Gateway has already sold over a thousand Pentium II systems worldwide. We're off to a great start."

"Gateway 2000 has long been a leader at delivering the latest technology to the market in volume. We are pleased to see the gutsy stance Gateway has taken with Pentium II processors. It's clear that the superior performance of the Pentium II processor will help Gateway systems meet the demands for visual computing," said Paul Otellini, executive vice president, Intel.

The Pentium II processor, a combination of the architectural advances of the Pentium Pro processor and the instruction set extensions of MMXTM technology, is an ideal platform for running a wide variety of application software. "A Pentium II processor-based system is a no-compromise solution that's a great choice for almost everyone. With 32-bit and MMX functionality and a starting price of $2499, debate over which processor to buy is essentially closed. The Pentium II processor should be at the heart of almost every serious user's machine," said Dave Berger, director of Americas product marketing.

Purchasers of Gateway's Pentium II processor-based desktops will find that their systems are hosts to other exciting technology, including: Ultra ATA compatible hard drives and controllers, 12X min/24X max CD-ROM drives, Telepath^TM modems for Windows with x2^® technology enabled, hardware accelerated 3D graphics, and wavetable audio. Pricing for systems powered by Intel's Pentium II processor range from $2,499 to $4,999, and each system can be custom configured to meet the user's specific needs.

For those looking for the ultimate PC, Gateway today introduces its most complete system yet, the G6-266XL. Featuring Intel's 266MHz Pentium II processor, 64MB of EDO RAM and a massive 9GB SCSI hard drive, the G6-266 XL is power without compromise. The video quality of the system's Virge GX 4MB video card is stunning on the Vivitron^® 1100, 21" (19.5" viewable image) monitor. The system's extraordinary audio quality is achieved through Ensoniq's wavetable audio card and an impressive 3-piece set of new Boston Acoustics loudspeakers. Other features include a 12X min/24X max CD ROM drive, the Telepath^TM modem for Windows with x2 technology and Seagate's TR4 SCSI tape back up unit. The system ships with Windows 95, Microsoft^® Office 97, Small Business Edition, and a 4-title MMX enhanced software bundle. The G6-266 XL is priced at $4,999.

Gateway's desktop PCs are not the only systems powered by the Pentium II processor. The Destination Big Screen PC/TV line also has models featuring both the 233MHz and 266MHz processors. "One of the strengths of our direct business model is the ability to offer our users new technologies when they become available in volume," said Berger. "The Destination Big Screen PC/TV pioneered the convergence market, and continues to lead the industry by being the first product of its kind to offer the Pentium II processor."

The Destination Big Screen PC/TV with a 233MHz Pentium II processor is priced at just $3,999. This system includes 32MB EDO DRAM, a Telepath modem with x2 technology, an Ensoniq wavetable soundcard, a harman/kardon 7-piece surround sound speaker system, a 31" VGA monitor and remote Field Mouse^® and keyboard. A Destination system with the 266MHz Pentium II processor is also available and includes 64MB EDO DRAM, a 6.4GB hard drive, a Telepath modem with x2 technology, and an EasyPhotoDrive^TM Scanner.

Gateway 2000 corporate and educational customers can also purchase Destination systems with Pentium II processors. These systems start at $3,699 and are available with a 233MHz processor as well as external ZIP drives, Boston Acoustics^® speakers, a 3Com network card, and Microsoft Office 97, Small Business Edition software.

Users who want to experience the power of the Pentium II processor first-hand will be able to do so at the three Gateway Country^SM Stores. These sites will be among the first retail spaces in the country to display systems built around the Pentium II processor. "Due to Gateway's leadership position the industry Gateway Country Stores can immediately offer users a chance to take Pentium II processor based systems for a test drive," said Joseph Burke, vice president, market development.

In addition to the new Pentium II processors, Gateway 2000 continues to offer Intel Pentium processors with MMX^TM Technology and Intel Pentium Pro processors in their desktop lineup.

Gateway 2000 offers toll-free technical support for the entire Gateway desktop line twenty-four hours a day, seven days a week. Gateway systems can be ordered by calling 800-846-2000. Additional information about the Gateway desktop product line is available on the Gateway 2000 Internet site at http://www.gw2k.com.

About Gateway 2000
Gateway 2000, Inc., a Fortune 500 company founded in 1985, is a global leader in the direct marketing of PCs. The company, headquartered in North Sioux City, South Dakota, has manufacturing facilities in the United States, Ireland and Malaysia, and employs over 10,000 people worldwide. Gateway 2000 products and services consistently win top awards from leading industry publications. In 1996, the company shipped 1.9 million systems and reported revenues of $5 billion and net income of $250 million.

GATEWAY 2000 is a registered trademark and GATEWAY is a trademark of GATEWAY 2000, Inc. Intel, Pentium, and MMX are registered trademarks of Intel Corp. Other trademarks are the property of their respective companies.

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