How did two guys on an Iowa cattle ranch start a PC company?
Gateway 2000 opened for business on September 5, 1985, in a farmhouse on the Waitt family cattle ranch outside Sioux City, Iowa. Ted Waitt was 22. He started the company with his brother Norm Waitt Jr. and his friend Mike Hammond, on a $10,000 bank loan that his grandmother, Mildred Smith, backed with her own certificate of deposit.
The pitch was plain. Skip the computer store, call a salesperson, describe what you needed, and the machine got built to that order and shipped to your door. In its first four months the company grossed about $100,000. By the end of 1986 it had passed $1 million in revenue and had traded its original name, the TIPC Network, for Gateway 2000.
Being nowhere near Silicon Valley was part of the math. Space in Iowa was cheap, payroll was cheaper, and the savings showed up in the price quoted over the phone. Revenue went from $12 million in 1988 to $70.6 million in 1989, $275 million in 1990 and $626 million in 1991. In 1992 it hit $1.11 billion, and Gateway 2000 was being written up as the fastest-growing company in the United States.
In December 1993 the company went public on Nasdaq under the ticker GATE at $15 a share. The Waitt family kept the large majority of the stock.
Why did Gateway ship its computers in cow-spotted boxes?
The black and white Holstein spots went onto the shipping cartons in 1991 and stayed there for the rest of the company's independent life. Ted Waitt did not draw them. "The cow spot was actually developed by a graphic designer. I can't take a claim for that," he told Inc. magazine in 1991.
The pattern did two jobs at once. It made Gateway 2000 look like Iowa rather than like Compaq or IBM, which mattered when buyers were being asked to send money to a mail-order company they had never heard of and then wait. And two-color printing on corrugated cardboard cost less than full color, so the cheapest packaging Gateway could buy was also the most recognizable.
It became the whole brand. Cow-print mugs, notepads, binders and stress toys went out to new owners in welcome kits, and those leftovers now outnumber the surviving computers on collector sites. The spotted box on a porch in 1996 told the neighbors what had just arrived without anyone reading a label.
What were Gateway Country Stores, and when did they close?
Gateway started opening Gateway Country Stores in the late 1990s. They were not stores in the sense that CompUSA was a store. You could not carry a computer out. They were showrooms with demo machines and staff who took orders, and the machine you configured was built at a Gateway factory and shipped to your house.
The idea addressed the one real weakness in mail order, which was that plenty of families still wanted to touch a computer before spending two thousand dollars on it. For a few years it worked. The chain peaked at just over 320 locations in 2001.
Then the arithmetic turned. The stores carried rent, fixtures and staff at exactly the moment buyers stopped needing convincing that ordering a PC online was safe. Gateway closed about 30 stores early in 2001 and another 80 in 2003. On April 1, 2004 it announced that the remaining 188 stores would close on April 9, cutting roughly 2,500 retail jobs. Every one of them shut on schedule, and Gateway has had no stores of its own since.
What went wrong for Gateway after 2000?
Gateway 2000 dropped the 2000 from its name in October 1998, the same year it moved its headquarters out of North Sioux City, South Dakota to San Diego, California. It moved again in 2001, to Poway. The company that had sold Midwestern plainness as its whole personality was now run from Southern California.
The peak was short. Gateway employed about 25,000 people in 2000. The dot-com collapse and a brutal PC price war followed, and the 2001 restructuring cut the workforce from roughly 24,600 to about 14,000. Dell was running the same direct model at greater scale and lower cost, and the PC itself had turned into a commodity where the cheapest acceptable box won.
Gateway's answer was to buy its way down-market. On March 11, 2004 it completed the purchase of eMachines, a budget PC maker, for $262 million in cash and stock. eMachines chief executive Wayne Inouye took over as chief executive of Gateway, and Ted Waitt stayed on as chairman. The combination sold more boxes at thinner margins and never restored the company's independence.
How did Acer end up buying Gateway for $710 million?
On August 27, 2007, Acer and Gateway announced that Acer would acquire all outstanding Gateway shares for $1.90 each, a deal worth about $710 million. It was the largest acquisition in Acer's history to that point and it was explicitly about the United States market, where Acer was weak.
"This strategic transaction is an important milestone in Acer's long history," J.T. Wang, chairman of Acer, said in the joint press release. Gateway's chief executive framed it as a fit rather than a rescue: "We believe our complementary geographical and product mixes, and our mutual focus on the consumer market makes Acer an outstanding partner for Gateway," Ed Coleman said in the same release. The deal closed in October 2007.
Acer spent that year collecting distressed PC brands on both sides of the Atlantic. It took Gateway in the United States and Packard Bell in Europe, which lifted it to third place among global PC vendors. Gateway's own eMachines line came along with it.
Is Gateway still in business in 2026?
Not as a company. Gateway has been a trademark inside Acer since 2007, with no independent operations, no factories and no stores. Acer let the name go quiet after 2013 and put out no new Gateway products for years.
The name came back on September 11, 2020, when Walmart announced a line of Gateway laptops and tablets sold only through Walmart, with tablets starting at $69 and laptops at $179. The cow-spotted packaging came back with them. The hardware is not built by Acer: the brand is licensed to Bmorn Technology, a Shenzhen manufacturer, which makes and sells the machines under the Gateway name. In 2026 Walmart still lists Gateway laptops, mostly entry-level and mid-range AMD and Intel notebooks. Acer handles the trademark, not the assembly line.
Where to find one today. The original cow-era machines are collectors' items rather than usable computers, and the promotional items outlast the hardware by a wide margin: cow-print mugs, notepads, welcome-kit binders and the stress-toy cows that shipped to new owners in the late 1990s. Prices swing hard on condition and on whether the original spotted box survived. Etsy is the practical place to look, through its Gateway 2000 listings. If you want to actually run software from that era, emulation on a modern PC is the cheaper route, as covered in running 90s PC games on Windows 11.
Frequently Asked Questions
Are Gateway laptops still made in 2026?
Yes. Gateway-branded laptops and tablets have been sold exclusively at Walmart since September 2020, and Walmart still lists them in 2026. Acer owns the Gateway trademark and licenses it to Bmorn Technology of Shenzhen, which builds and sells the machines, so a Gateway laptop today is not made by the company that shipped cow boxes from Iowa.
Why did Gateway computers come in cow boxes?
Gateway 2000 adopted the black and white Holstein pattern on its shipping cartons in 1991, tying the brand to its origins on a cattle ranch near Sioux City, Iowa. The design was drawn by an outside graphic designer, not by founder Ted Waitt, and two-color printing on cardboard was cheaper than full color, so the packaging that made Gateway recognizable also cost the company less.
When did Gateway Country Stores close?
Gateway announced on April 1, 2004 that its remaining 188 Gateway Country Stores would close on April 9, 2004, eliminating about 2,500 retail jobs. The chain had peaked at just over 320 locations in 2001, with roughly 30 closed early that year and another 80 in 2003. Gateway has operated no retail stores of its own since April 2004.