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Gateway, Compaq pitch low-cost PC-TVs

New, inexpensive appliances from Compaq and PC-TV offerings from Gateway 2000 are likely to help the hybrid products reach broader audiences.

ATLANTA--Compaq Computer (CPQ) and Gateway 2000 (GTW) representatives said here today that they are hoping to help PC-TVs reach a broader audience by making cheaper models.

Compaq says it is considering building low-cost information appliances for home users based on the same PC architecture that dominates the desktop. Its current "PC Theater" PC-TV costs about $5,000, a price that will draw a small group of enthusiasts who always buy the latest technology but is too high for the mass market.

Compaq says new devices could take advantage of the upcoming digital television broadcast standards, which are intended to offer interactive services in addition to higher-quality audio and video on television sets, said John Stautner, a director of software in Compaq's consumer division during a panel discussion today at Spring Comdex.

Stautner says the company is looking at Windows CE for its information appliances.

Gateway 2000, which virtually created the PC-TV category with last year's introduction of its Destination series systems, will also try to appeal to a larger market with less-expensive versions of its Destination PC-TVs.

"We intend to drive the PC-TV into the mainstream by offering lower-price systems. We will continue to sell to the enthusiast market, but at the same time we are looking at ways to reduce cost," says Stacey Hand, Destination product marketing manager. "We think it's a viable solution for the whole family."

The current Gateway 2000 PC-TVs cost anywhere from $2,800 to $5,000.

Gateway has examined the market for low-end set-top boxes like the WebTV, but Hand says that consumers are worried that these products will become obsolete too quickly.

"We'll be working down the food chain as the market changes. If customers say they want a set-top box, it's easy to do something about that. We don't see customers asking for those now," Hand said.

Oracle chief executive Larry Ellison said here at Spring Comdex that information appliances based on the network computing platform--advanced by Oracle subsidiary NCI--will let also people view and interact with broadcast quality content. (See related story)

But Compaq stressed that its appliances are a different category from what NCI is planning.

The question is whether the PC-TV devices that will be most popular in the living room will be based on the PC architecture or a new design offered by Oracle or some other company.