CHANNELING THE FUTURE OF TVS, COMPUTERS.

Byline: Evan Ramstad Associated Press 

Gateway 2000 Chief Executive Ted Waitt is a ponytail-wearing fan of rock 'n' roll who two years ago told one of his lieutenants to see what it would take to make a PC and TV work together.

The result was unveiled Thursday - a $3,800 PC and home theater system that is a powerful example of future products as the physical difference between TVs and computers is wiped out by advances in digital technology.

The product, called Destination, will go on sale April 8 through Gateway's toll-free phone lines, the same way it sells more than 1 million PCs a year. It may eventually reach stores though Gateway has no business structure to handle that now.

At heart, the new machine is a Pentium chip-based PC with special accessory cards for high quality sound and video. But it is attached to a 31-inch computer monitor, which looks better than an ordinary TV.

"This has all the benefits of an industry-standard PC but shown in a new environment," said Waitt, who initially wanted something for a family to play computer games without being scrunched around a small monitor.

Ordinary TVs can't display text without having the words appear like they're shifting around a bit. So the company designed the product around the better-looking computer monitor technology.

The 31-inch screen is the most expensive part of the system and the one that will be the hardest to keep in supply, Waitt said. Gateway will manufacture the computer portion in North Sioux City, S.D., where it is based. It plans to sell surround-sound speakers by Harmon International as a $700 option.

The system comes with a wireless keyboard and a remote control. Both can control the cursor and don't have to be pointed directly at the screen.

During a news conference, Waitt and product developer Tom Grueskin showed how the machine can flip back and forth between a TV show and the Internet. The TV show can even be put in a portion of the screen while data is viewed in the rest.

"It takes computing out of the one-on-one realm," said analyst Aaron Goldberg of Computer Intelligence-Infocorp. "It's a breakthrough design and product concept."

For the time being, Destination puts Gateway at the front of the colliding worlds of computers and consumer electronics.

Thomson Electronics, maker of RCA and GE brand TVs, has demonstrated a similar concept to reporters but set no date for availability. Apple Computer Inc. has created the $600 Pippin as a simpler version of its Macintosh computer that can be attached to a TV. Bandai Co. will sell the Pippin in Japan starting this week and in the United States this summer.

Some analysts were surprised to see such an innovative product from Gateway. The company is known for weaving the latest PC technology, particularly faster chips, into its product line very quickly. To do so, it has become skillful at manufacturing processes.

But its own innovations have grabbed the spotlight just a few times, mostly in lightweight notebook PCs.

"If people doubt the innovation that exists at Gateway, this should answer the question pretty succinctly," analyst Goldberg said.

Waitt said he understands when people express surprise about the company's inventiveness but he doesn't think another major PC maker could have pulled off a product like Destination.

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Photo (1--color) Gateway's Ted Waitt and Tom Grueskin show off a blown-up version of the Destination, a TV-computer hybrid. (2) Ted Waitt, chairman and CEO of Gateway 2000, made it a company goal to see how a TV and PC could work together. Associated Press