AOL, GATEWAY OFFER `APPLIANCES'.

America Online Inc. and Gateway Inc. introduced a line of low-cost Internet "appliances" based on the Linux operating system, that eliminate most of the complexity - and much of the cost - of personal computers.

Gateway will design and engineer three appliances for connecting to AOL from the home. AOL last year agreed to invest $800 million in the San Diego computer maker.

These include a "countertop" appliance that can be mounted under a kitchen cabinet; a "Web pad" that connects wirelessly to the Internet via a home base station; and a bulkier appliance meant to sit on desktops. All are expected to cost less than $500. Consumers also will have to subscribe to AOL, according to company executives. Two of the three products will be available by the end of the year; the Web pad will go on sale next year, the companies said.

AOL, Dulles, Va., said it would develop a special version of AOL called Instant AOL for the appliances. Unlike PCs, the appliances will turn on immediately without going through a long boot-up process and put consumers online more quickly.

Gateway and AOL said they chose the Linux operating system, which is developed by volunteer programmers who coordinate their efforts over the Internet, because it is faster and more reliable than other software.

The devices point out how traditional operating systems are becoming less important in the emerging Internet appliance market. Instead, users will interact with their appliances entirely through AOL and the Web.