FOR IMMEDIATE RELEASE

Gateway 2000^® Introduces World’s First
DVD-equipped Big Screen PC/TV
Direct marketer reinforces leadership in convergence market
with DVD solution on Destination system

NORTH SIOUX CITY, SD, June 19, 1997 – Gateway 2000, Inc. (NYSE: GTW), a leading direct marketer of personal computers and convergence products, today announced the world’s first DVD-equipped Destination Big Screen PC/TV. This enhancement to the industry leading Destination system is the most recent example of the pioneering role Gateway is playing in the convergence PC product category.

DVD, or digital versatile disk, is the future of home entertainment because it provides users higher image quality and greater flexibility than current laser discs, CDs and videotape. The DVD disk holds up to 133 minutes of video or 4.7 Gigabytes of data, comparable to the capacity of 7 compact discs. More than 150 DVD titles - including movies and games - are currently available, with the number expected to grow in the next few months.

Gateway is introducing its DVD solution first on the Destination Big Screen PC/TV, which last year became the first product to combine the power of a PC with a big screen TV. The Destination Big Screen PC/TV utilizes traditional PC architecture for maximum expandability and compatibility. It also employs a cable-compatible tuner for connection to other video sources such as laser disc, game machines and VCRs

Combining DVD with Gateway’s convergence product creates a new type of viewing environment by incorporating a total digital DVD solution into the Destination PC/TV. The fully digital design does not require the video image to be converted to a NTSC analog TV signal for display. In addition to experiencing higher quality digital video and audio, users can also take advantage of DVD encoded PC game applications not compatible with stand-alone set top DVD players.

When it comes to sound quality, the DVD-equipped Destination Big Screen PC/TV delivers an encompassing 3-D audio experience. The system supports outputs for both Dolby Pro Logic and the new Digital Dolby AC-3. The new Digital Dolby AC-3 surround sound allows for an additional channel for rear speaker sound separation.

"DVD on the Destination Big Screen PC/TV is a breakthrough for home entertainment. This is the best platform available for the combination of digital movies, games and music. The Destination Big Screen PC/TV with DVD blends premium audio and video quality with the visual impressiveness of Gateway’s 31 inch VGA screen," said Dave Berger, director of product marketing, Americas, Gateway 2000. "When we launched Destination Big Screen PC/TV last year, we created a new class of convergence products. Today, we’re taking it to the next level. This system does more than compute; the DVD-equipped Destination Big Screen PC/TV is the perfect centerpiece of a complete home entertainment system - home theatre, stereo, ground-breaking computer game machine, Internet surfer and a truly personalized computer."

Gateway’s DVD solution, which will play DVD and conventional audio compact discs as well as CD-ROMs, offers control over color, contrast, brightness and tint through the use of the Mpact^TM media processor. The Mpact media processor enables an enhanced Big Screen PC/TV experience by presenting some of the brightest, most vivid color displays of DVD available on a computer screen.

The Mpact media processor was architected by Chromatic Research, Inc., of Sunnyvale, California, and co-developed and sold by Toshiba America Electronic Components, Inc. (TAEC) of San Jose, California.

Gateway’s DVD-equipped systems featuring Pentium^® with MMX^TM technology start at $3,199 with first shipments expected within the next 30 days. As with all Gateway systems, each Destination Big Screen PC/TV can also be custom built to order. Each Destination Big Screen PC/TV will include a DVD sampler disk with trailers from 18 Warner Brothers movies.

For more sales and product information, call 1-800-846-4875 or visit Gateway 2000’s Internet site at www.gw2k.com.

About Gateway 2000, Inc.
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. Revenue for the first quarter of 1997 was $1.4 billion with net incomes of $67.5 million.

About Toshiba America Electronic Components, Inc.
TAEC is the North American manufacturing, sales and marketing arm of one of the world’s largest suppliers of emiconductors, integrated circuits and electronic components for industrial and consumer applications. The company is the recognized leader in CMOS technology and has one of the broadest IC product lines in the industry. In addition, Toshiba is a leading manufacturer of technologically advanced electron tubes and solid state devices, including color picture tubes, display monitor tubes, liquid crystal displays, medical tubes, rechargeable batteries, microwave components, laser diodes and optical transmission devices. The Systems IC Division is located at 1060 Rincon Circle, San Jose, CA 95131. For more company information, please visit TAEC’s Internet home page at http://www.toshiba.com/taec

About Chromatic Research, Inc.
Chromatic Research, Inc. is the pioneer and leader in media processing technology. The Mpact media processor is software-scalable and can integrate virtually any combination of multimedia functions, including DVD, 3D and 2D graphics, videophone, audio, fax/modem and telephony. Chromatic Research is also the world’s first "chipless" semiconductor company, based on a unique business model whereby the company’s semiconductor partners Toshiba, LG Semicon and SGS-THOMSON co-develop, manufacture and sell the Chromatic-architected Mpact media processor and Chromatic Research develops and sells the enabling software called Mpact Mediaware. Founded in 1993, the company is privately held. Chromatic Research, Inc., 615 Tasman Drive, Sunnyvale, CA 94089-1707. For more company information, please visit www.mpact.com

Mpact^TM Media Processor
Features

• High-performance, low-cost, software-driven multimedia accelerator
• Performs full-screen, 30 frames per second, true DVD recording
• Works as co-processor to Intel Pentium CPU with MMX
• Runs at 3.6 billion operations per second (48 operations per clock cycle), performing hundreds of tasks simultaneously
• Home theater quality DVD video and audio
• Architected by Chromatic Research, Inc. of Sunnyvale, California and co-developed and sold by Toshiba America Electronic Components, Inc. (TAEC) of San Jose, California
• Software Upgradeable

Benefits to DVD-Equipped Big Screen PC/TV

• Works with CPU to simultaneously decode and coordinate all elements of DVD playback, including MPEG-2 video, Dolby Digital audio, navigation, sub-picture, and copy protection
• Enhances standard DVD with Chromabright^TM real-time digital brightness control and Chromadjust^TM real-time digital color processing technologies
• Employs AVsync^TM technology for synchronization between DVD audio and video
• Provides a new level of viewing experience by incorporating a pure digital DVD solution
• Displays DVD in 720 x 480 resolution. Since this is the native DVD resolution, no artifacts are introduced into the digital video.

What industry spokespersons are saying about the
DVD-equipped Destination Big Screen PC/TV
Frank LoVerne, Vice President, Advanced Media for Warner Media Services
"Systems like the Destination Big Screen PC/TV will establish the PC as a viable force in home entertainment and create new opportunities for the already successful DVD format. The system will also help pave the way for multimedia developers and publishers to create new worlds and levels of interactivity that have only been hinted at, using the same state-of-the-art audio and video quality DVD home video owners now enjoy."

Joe Ferlazzo, Analyst, Technology Business Research
"DVD technology and Gateway 2000’s Destination system are a perfect match. The large monitor and remote keyboard/mouse make the Destination a system that promotes highly interactive PC computing experiences. Adding DVD technology to the interactive Destination environment will be ideal for family entertainment, corporate training, and collaborative education needs. By incorporating DVD technology into its Destination system, Gateway continues to define the area of PC/TV convergence ahead of the competition."

Mike Kelly, President, Techtel Corporation
"Gateway is again showing the willingness, determination, and ability to lead the development of the PC/TV market. The latest improvement, integrating DVD into the Destination, is the logical next step and Gateway’s approach adds value to the combination of PC with TV, providing perhaps the first hard benefits of convergence to the less than avid PC user."

Aaron C. Goldberg, Executive Vice President, Computer Intelligence
"The Destination is the pioneer of an entirely new class of consumer electronic device. The implementation of DVD will only serve to increase the value and fun of the Destination experience. The PC TV’s, like Destination, will drive new benefits and entertainment options for consumers."

Richard F. Doherty, Director, Envisioneering
"The multimedia performance flexibility and power reserve of the Mpact media processor allows Gateway to deliver a much richer interactive playback experience than mere DVD movie players alone. Bravo to Mpact and Gateway for delivering the highest performance DVD multimedia enjoyment environment available today!"

Bob Brown, President and Chief Operating Officer, Toshiba America Electronic Components, Inc.
"Toshiba has set the standard for DVD. The Mpact DVD solution offers the best price/performance for today’s advanced multimedia applications. We’re committed to developing advanced technologies that enable DVD capabilities on PCs like Gateway’s Destination System which delivers high-performance DVD at an affordable price."

Wes Patterson, President, Chromatic Research
"The Mpact DVD solution is an excellent example of how software-programmable media processors can help bridge the multimedia quality gap between PCs and consumer electronics."

Mpact, Chromabright, Chromadjust, and AVsync are trademarks of Chromatic Research Inc.

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