Two years ago, PC maker Gateway acquired the rights to the personal-computer industry's most famous cult product, the Amiga PC. The Amiga made its debut in 1985, and still has fans, partly as a result of a James Dean-like history: a rapid rise, then a tragic end.

Gateway paid about US$13 million for 47 Amiga patents, including those for important multimedia techniques. The San Diego PC maker's original plan was to use the patents as a bargaining chip in royalty negotiations with other PC makers. "It was a treasure chest," says Joe Torre, a former Amiga hardware engineer.

Now, Gateway is aiming to revive the Amiga in a bold move to set standards for the next era in computing. It quietly has set up and staffed a new Amiga subsidiary to cobble together low-cost "information appliances" for the Internet, based on Amiga technology, that can be linked like home-stereo components to add features.

"There's a new computer revolution on the horizon that has to do with making computers a natural part of everyday life," says James Collas, the Amiga unit's president and a former Gateway executive. He says the unit will craft everything from digital-music players and game machines to wireless tablets that link to the Internet.

Gateway will pit its tiny subsidiary against PC kingpins such as Microsoft and consumer-electronics companies such as Sony and Philips Electronics, which also are developing new-age information devices. Mr. Collas says Amiga will license its designs to consumer-electronics makers to promote technologies that can be embraced far beyond its parent.

It could use all the help he can muster. Early entrants in the computer-consumer electronics convergence market, such as WebTV, were gobbled up quickly by the giants (Microsoft bought WebTV). Even for a company with US$7.5 billion in sales, the risks are high for Gateway. "It's becoming a battle for the big boys," says Sean Kaldor, a researcher at International Data Corp.

Reassembling design team
How much of the new Amiga will come from its past isn't known. Mr. Collas has recruited designers from Amiga's heyday along with software specialists from Silicon Graphics and Apple.

Amiga, he says, will operate independently from its parent, and be free to strike its own agreements. Mr. Collas wouldn't say if Gateway plans to spin off the subsidiary. A Gateway spokesman declined to comment.

Among the San Diego division's first products will be a new Amiga PC that Mr. Collas says is aimed to bring Amiga PC software writers back into the fold. Next week, the company plans to release a new version of the Amiga operating system that provides access to the Internet.

The Amiga is nothing if not resilient. It first appeared 14 years ago as a spunky alternative to the IBM PC and Apple's Macintosh. Graphics and film enthusiasts flocked to the machine because of its ability to handle video and sound. Commodore Electronics Ltd. sold five million of the low-cost machines before the company's sudden demise. Even today, Hollywood animators and filmmakers still use the machines for generating special effects.

Amiga went into decline after Commodore filed for bankruptcy in 1994, and stopped making the machines. The first attempt to resurrect Amiga came in 1995, when German computer maker Escom AG acquired the Commodore patents in a bidding contest with Dell Computer Corp. But, like Commodore, Escom filed for bankruptcy a year later, and manufacturing was halted again. Amiga devotees became scavengers, scouring online bulletin boards for used machines and add-on parts. Indeed, there are dozens of tiny companies still living off the Amiga accessory market.

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