Gateway declares VCR obsolete with simple low-cost DVD recorder

November 11, 2003

Continuing to build on its leadership in home
entertainment, Gateway today announced its first DVD recorder. Priced at just $
349(1), approximately $ 100 less than competing products, the Gateway(TM) AR-230
DVD Recorder will make VCRs a thing of the past. With this latest addition to
its CE product line, Gateway offers consumers a wide selection of home
entertainment products just in time for the holidays.

Bringing DVD recording from the PC to the living
room, the Gateway(TM) AR-230 DVD Recorder is one of the easiest and most
affordable ways to record, play and store movies and TV programs on DVD. In
addition to offering the standalone product, Gateway will also be the first to
deliver a complete home theater solution incorporating a DVD recorder with its
1,000-watt KAS-303 home theater system. The DVD recorder category is growing
quickly, with sales expected to grow from 1.5 million units this year to nearly
5 million units in 2004.(2)

The Gateway(TM) AR-230 DVD Recorder was among the
products launched today at the GatewayÂ® store in New York City, where chairman
and CEO Ted Waitt revealed the company's dramatic retail transformation and
unveiled 14 new products for businesses and consumers.

The new DVD Recorder is the latest innovative
product in Gateway's transformation from a PC company into a branded integrator
of personalized technology solutions. The company showcases its digital products
in its nationwide network of 190 stores. These stores allow consumers to
evaluate how the products perform and work together prior to making a purchase.
According to the Consumer Electronics Association, 94 percent of consumers
purchase CE products at retail(3), giving Gateway a distinct advantage with its
multi-channel direct model.

"We are leveraging our direct model to bring more
value to the DVD recorder category and accelerate adoption of this new
technology, much like we did with plasma TVs," said Matt Milne, senior vice
president and general manager of consumer solutions. "Our DVD Recorder's
convenience and ease-of-use will resonate with consumers who want a quick,
simple and reliable method of recording and storing digital video."

AR-230 DVD Recorder Preserves Video for the
Long Run

The AR-230 DVD Recorder replaces the VCR, allowing
customers to record TV programs, store movies and playback digital video and
other multimedia content. It can record up to six hours of video on a 4.7GB
disc. Offering superior quality and longevity over VHS tape, DVD discs maintain
recordings up to 100 years versus the three to five years of the average VHS
tape. DVD discs also take up significantly less space than bulky VHS cassettes.
The Gateway DVD Recorder supports both DVD+RW and DVD+R discs in which Gateway
will offer as additional items with the DVD Recorder.

Using the Gateway AR-230 DVD Recorder, consumers
can record favorite TV shows, movies and sports events onto a single DVD with
the touch of a button, unlike the multiple steps required to program a VCR.
Also, RCA input enables consumers to transfer taped copies of home videos from a
VCR onto non-degradable DVD discs.

The DVD Recorder records using DVD+RW or DVD+R
Media and can play a wide array of media such as DVD-ROM, DVD+R/+RW, CD-R/RW and
CD-ROM. It's compatible with DVD-Video, DVD+VR, Super VCD, Video CD, Audio CD,
MP3 CD and JPEG CD. It also has a full range of inputs and outputs including
IEEE 1394 for recording home movies directly from a digital camcorder as well as
S-video, component, digital audio and progressive scan.

Pricing, Limited Warranty and Service &
Support

Gateway's AR-230 DVD Recorder is available for $
349(1) and the bundled solution including the KAS-303 home theater system is
offered for $ 1,099(1).

Customers can learn more about DVD technology from
highly trained professionals at Gateway's 190 stores nationwide. Gateway
supports its DVD Recorder with a one-year limited warranty and a range of
service plans.(4)

About Gateway

Since its founding in 1985, Gateway has been a technology and direct-marketing pioneer, using
its call centers, web site and retail network to build direct customer
relationships. As it transforms itself from a leading PC company into a branded
integrator of personalized technology solutions, its range of Gateway-branded
products is expanding to include thin TVs, digital cameras, tablet PCs, and
enterprise products, all of which are designed to work seamlessly together with
the company's award-winning line of PCs. Gateway is America's second most
admired computer company, according to Fortune magazine(5), and its products and
services received more than 125 awards and honors last year. Visit www.gateway.com for more
information.

All offers subject to change without notice or
obligation and may not be available through all sales channels. Unless noted,
prices exclude shipping and handling. Applicable taxes extra.