FOR IMMEDIATE RELEASE

Gateway 2000^® Reaffirms Expectations for the Year
Cautionary Comments on Second Quarter

NORTH SIOUX CITY, SD, June 17, 1997 – Gateway 2000, Inc. (NYSE: GTW)Chairman Ted Waitt, speaking before an institutional investors conference in New York today, commented that revenues in the second quarter, while substantially above the prior year, are unlikely to reach analyst expectations for the second quarter ending June 30, 1997.

"Demand is really starting to accelerate," said Waitt. "The analogy of the quarter coming in like a lamb and leaving like a lion appears to hold true this year. It just took longer than expected for the lion to make an appearance. " As a result of the later than expected seasonal spike, the company expects revenues for the quarter to be basically flat compared with the first quarter of 1997 and gross margins to be in line with expectations. Despite the revenue story, unit growth year over year should still be in excess of 30% for the quarter.

Waitt also commented that operating expenses for the quarter were running higher than analyst expectations, mainly as a result of investments to provide support for the anticipated strong sales in the second half of the year. As a result of this increased spending and lower than expected sales in the quarter, operating expenses as a percentage of revenues for the quarter should increase by approximately 1% from the 12% rate experienced in the second quarter last year and the first quarter of this year.

"We continue to be very positive on the outlook for the second half of the year," said Waitt. "Even though the second quarter is weaker than what we would have anticipated, we continue to feel very good about our competitive position heading into the last half of the year, the period that historically accounts for the biggest percentage of our business."

About Gateway 2000, Inc.
Gateway 2000, Inc., a Fortune 500 company founded in 1985, is a global leader in the direct marketing of PCs. The company, headquartered in North Sioux City, South Dakota, has manufacturing facilities in the United States, Ireland and Malaysia, and employs over 10,000 people worldwide. Gateway 2000 products and services consistently win top awards from leading industry publications. In 1996, the company shipped 1.9 million systems and reported revenues of $5 billion. Revenue for the first quarter of 1997 was $1.4 billion with net incomes of $67.5 million.

Special Note
The above statements include forward-looking statements based on current management expectations. Factors that could cause future results to differ from these expectations include the following: general economic conditions; growth in the personal computer industry; competitive factors and pricing pressures; component supply shortages; and inventory risks due to shifts in market demand. Additional factors are described in the company’s reports filed with the Securities and Exchange Commission.

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