Seems Gateway Isn't the Friend Amiga Fans Thought It Was

The computer maker was going to revive the revered machine -- but now it has other plans for the name

By Steven V. Brull
Business Week

September 10, 1999

They may be computing's closest-knit cult -- the several hundred thousand people who continue to use Amiga computers, even though the last one rolled off the assembly line in 1994. Commodore introduced the Amiga machine in 1985 but went ultimately went bankrupt. Then Escom, a German company, took over. But it, too, fell on hard times and shipped its last units in 1994. The machines excel in processing graphics and audio/video content, but they're increasingly hard to maintain and equip with software.

Still, the Amiga faithful have hung in there because Amiga's new owner, Gateway Inc., promised to resurrect the machine as a sleek Web cruiser by this Christmas. "The new Amiga is going to take the breath away from all computer users on the face of this earth," gushs Danish fan Michael Ljungstedt Andreasen. Such is the enthusiasm for Amigas.

Alas, it's not to be. Gateway has dropped plans to build the new machine. Instead, it will focus on creating a user-friendly interface that will link Internet appliances over home networks. "Amiga will be the Internet-appliance infrastructure company. We don't intend to build anything," says a source close to the company. Gateway declines to comment.

TV's and Toasters

For Gateway, which paid some $13 million for the rights to Amiga patents in 1997, the shift emboldens its strategy to diversify beyond low-margin PCs and derive 30% of its revenue, and nearly half its profits, from Internet services within three years. By early next year, Amiga hopes to have test versions of the new interface that will link wireless tablets with TVs, and toasters with phones. Built upon Sun Microsystem's Java and Jini technologies, and with the Linux operating system at its core, the interface will allow users to control devices or download content off the Web with simple touch or spoken commands.

The new strategy appears to have jelled in recent weeks. Until last month, Amiga had talked not only of its new "operating environment" but also of building a new Amiga multimedia computer. It even released sketches of sleek prototypes that looked like a cross between a set-top box and a game machine.

But on Sept. 1, Amiga President James Collas, who had maintained close ties to the Amiga faithful, was abruptly replaced by former Chief Operating Officer Thomas J. Schmidt. Now, Amiga has dropped plans to engage in manufacturing and appears to have broadened its ambitions by moving into the home-networking territory targeted by behemoths such as Microsoft, Sun Microsystems, and Sony. "There won't be a whole lot that relates to the Amiga name," says one insider.

Command Lines

Amiga's new direction may have been prompted by the input of recently hired high-profile scientists from Apple Computer, Xerox Parc, and Silicon Graphics. They'll work in a new research facility in San Jose, Calif. Further details regarding Amiga's new strategy, its technology partners, and investors in the project will be announced later this month, insiders say.

The primary goal is to develop a powerful and widely disseminated interface that will make it easier for people to access content on the Web. Consider the process of downloading music. Today a user must execute a complicated process to find a Web site and download music to be used on a special player. In contrast, Amiga's new software could be downloaded or embedded onto networked TVs, telephones, or personal digital assistants, and will allow users to get what they want through simple touch-screen or voice commands. "You'll be able to say, 'Show me the news or the weather' and you won't have to wait through the hassles of booting up a PC," one source says. Later, Amiga envisions a business selling software applications over the Internet that will add functionality to Net appliances.

"The idea is to enable an extra layer of processing on top of Sun's standard to connect devices, then license it to manufacturers. It's not a bad idea, but the competition will be a little tough," says David B. Haynie, a former senior designer at Amiga and cofounder of Met@box, a German maker of set-top boxes.

"Living on Garbage"

For the Amiga faithful, Amiga's new direction will be a disappointment. "We've been living on scraps out of the garbage since Commodore went bust," says Harv Laser, founder of the AmigaZone.com online service. "This hurts."

But not all is lost. Iwin Corp., a small German company outside Munich, plans to announce on Sept. 25 that it will assemble Amiga clones, sans monitors, for $239 to $499. Still, Iwin will need to license Amiga's operating system and find suppliers for custom graphics chips that rely on Amiga patents. "I'm pretty sure Amiga will license their new operating system," says Iwin President Martin Steinbach. If so, Amiga users can keep up their faith, but the flock is likely to dwindle even further.

EDITED BY DOUGLAS HARBRECHT