GATEWAY, AOL TO RELEASE INTERNET APPLIANCE

Gateway and America Online announced that they will be using a non-Intel processor in their new Internet home appliance, a wireless Web pad scheduled to go on sale later this year, as well as a version of the Linux operating system. The move represents a dramatic break from what is frequently called the "Wintel duopoly": the combination of the Windows operating system and the Intel chip inside.

Gateway and AOL plan to use a microprocessor made by the Transmeta Corporation, a Santa Clara, CA, company founded by, among others, former Sun Microsystems hardware designer David Ditzel and Microsoft co-founder Paul Allen. The Transmeta chip is a less expensive, low-power alternative to the Intel chip

Gateway execs explained that their decision to break the Wintel grip came about because the new devices would not be personal computers.

"We're not building a personal computer, we're building an appliance," said Gateway Senior VP and Chief Technology Officer Peter Ashkind. "Hence, there was no strong requirement for Windows."

Transmeta's Ditzel added, "The truth is that the phrase Internet appliance has become a code word in the industry meaning ‘no Windows.'"

The Gateway-AOL appliance is just one step in the direction of what many industry-watchers are terming the "post-PC" computing era, in which consumers will be turning more and more to digital cellular phones and personal digital assistants and less and less to personal computers. This trend is something both Intel and Microsoft has refuted, sticking to their belief that the PC will remain the center of the consumer's computing universe and the new "appliances" will function as peripherals.

Gateway execs said the first version of the new appliance will go on sale during the fourth quarter, with wireless versions available some time in the future. The companies are aiming for a price below $500.

The fallout to this decision will be interesting to note, especially since Gateway has worked closely with both Intel and Microsoft for so many years. And with the government driving a chisel into the Microsoft empire, it will be entertaining to see if bill gates',390,400);">bill gates',390,400);">Bill Gates can raise a stink about this without confirming the government's position that Microsoft is a monopoly.