SECURITIES AND EXCHANGE COMMISSION
                     Washington, D.C.  20549

                           FORM 10-Q

{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
    For the quarterly period ended March 31, 1998
                               OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934
    For the transition period from                to

             Commission file number     0-22784

                       GATEWAY 2000, INC.
     (Exact name of registrant as specified in its charter)

            Delaware                      42-1249184
(State or other jurisdiction of        (I.R.S. Employer
 incorporation or organization)      Identification No.)

                       610 Gateway Drive
                         P.O. Box 2000
              North Sioux City, South Dakota 57049
       (Address of principal executive offices, zip code)

Registrant's telephone number, including area code:(605) 232-2000


      Indicate by check mark whether the registrant (1) has filed
all  reports required to be filed by Section 13 or 15(d)  of  the
Securities  Exchange Act of 1934 during the preceding  12  months
(or  for such shorter period that the registrant was required  to
file  such  reports),  and (2) has been subject  to  such  filing
requirements for the past 90 days.  Yes    X      No       .

      As  of  May 8, 1998, there were 155,602,006 shares  of  the
Common   Stock  of  the  Company,  $.01  par  value  per   share,
outstanding.
                    I.  FINANCIAL INFORMATION

 Item 1. Financial Statements

                       Gateway 2000, Inc.
              CONSOLIDATED STATEMENTS OF OPERATIONS
       For the three months ended March 31, 1997 and 1998
            (in thousands, except per share amounts)
                           (Unaudited)

                                      Three Months ended March 31,
                                         1997              1998
                                                    
Net Sales                         $    1,419,336    $    1,727,927
Cost of goods sold                     1,153,543         1,391,433
    Gross profit                         265,793           336,494
Selling, general and                                              
   administrative expenses               170,915           227,293
   Operating income                       94,878           109,201
Other income, net                          8,200             9,347
   Income before income taxes            103,078           118,548
Provision for income taxes                35,562            42,677
   Net income                    $        67,516    $       75,871
                                                                  
Net income per share:                                             
     Basic                       $          0.44    $         0.49
     Diluted                     $          0.43    $         0.48
                                                                  
Weighted average shares                                           
   outstanding:
     Basic                               153,557           154,548
     Diluted                             157,291           157,575
                                                                  

     
<TABLE>
                               Gateway 2000, Inc.
                           CONSOLIDATED BALANCE SHEETS
                      December 31, 1997 and March 31, 1998
                    (in thousands, except per share amounts)
                                   (Unaudited)
<CAPTION>
                                       
                                                 December 31,         March 31,
                                                     1997                1998
<S>                                         <C>    <C>            <C>   <C>
ASSETS                                                         
Current assets:
   Cash and cash equivalents                $        593,601      $     742,170
   Marketable securities                              38,648             66,844
   Accounts receivable, net                          510,679            471,883
   Inventory                                         249,224            185,405
   Other                                             152,531            154,615
         Total current assets                      1,544,683          1,620,917
Property, plant and equipment, net                   336,469            361,072
Internal use software costs, net                      39,998             37,546
Intangibles, net                                      82,590             78,583
Other assets                                          35,531             44,105
                                             $     2,039,271     $    2,142,223
LIABILITIES AND STOCKHOLDERS' EQUITY                                           
Current liabilities:                                                           
   Notes payable and current maturities                                        
     of long-term obligations                $        13,969     $       10,391
   Accounts payable                                  488,717            462,091
   Accrued liabilities                               271,250            308,879
   Accrued royalties                                 159,418            150,912
   Income taxes payable                               26,510             40,326
   Other current liabilities                          44,042             48,379
       Total current liabilities                   1,003,906          1,020,978
Long-term obligations, net of current                                          
    maturities                                         7,240              2,768
Warranty and other liabilities                        98,081             93,619
       Total liabilities                           1,109,227          1,117,365
Contingencies (Note 5)                                                         
Stockholders' equity:                                                          
   Preferred Stock, $.01 par value,                                            
    10,000 shares authorized; none issued                                      
    and outstanding                                        -                  -
   Class A Common Stock, nonvoting, $.01                                       
    par value, 2,000 shares authorized;                                        
    none issued and outstanding                            -                  -
   Common Stock, $.01 par value, 440,000                                       
    shares authorized; 154,128 shares and                                      
    154,997 shares issued and                                                  
    outstanding, in 1997 and 1998                                              
    respectively                                       1,541              1,550
   Additional paid-in capital                        299,483            318,481
   Retained earnings                                 634,509            710,381
   Accumulated other comprehensive income            (5,489)            (5,554)
         Total stockholders' equity                  930,044          1,024,858
                                             $     2,039,271     $    2,142,223
</TABLE>                                                                      
<TABLE>


                               Gateway 2000, Inc.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               For the three months ended March 31, 1997 and 1998
                                 (in thousands)
                                   (Unaudited)
<CAPTION>
                                      
                                                 Three Months Ended March 31,
                                                               1997         1998
<S>                      <C>   <S>                         <C>    <C>            <C>    <C>
Cash flows from operating activities:                                                          
   Net income                                             $        67,516        $       75,871
   Adjustments to reconcile net income to net cash                                             
     provided by (used in) operating activities:                         
       Depreciation and amortization                               19,009                23,971
       Provision for uncollectible accounts                                                    
         receivable                                                 1,184                 1,412
       Deferred income taxes                                     (13,142)              (18,205)
       Other, net                                                      23                   671
   Changes in operating assets and liabilities:                                                
       Accounts receivable                                         28,567                37,384
       Inventory                                                 (42,681)                63,819
       Other current assets                                      (38,872)                 8,416
       Accounts payable                                            12,802              (27,957)
       Accrued liabilities                                        (2,804)                23,719
       Accrued royalties                                           15,101               (8,506)
       Income taxes payable                                        13,603                22,660
       Other current liabilities                                  (5,969)               (4,234)
       Other liabilities                                            3,761                16,616
          Net cash provided by operating activities                58,098               215,637
Cash flows from investing activities:                                                          
   Capital expenditures                                          (13,451)              (38,162)
   Internal use software costs                                    (3,744)               (3,036)
   Purchases of available-for-sale securities                     (8,985)              (34,928)
   Proceeds from maturities of available-for-sale                                              
     securities                                                         -                 6,864
   Other, net                                                         461                 (210)
     Net cash (used in) investing activities                     (25,719)              (69,472)
Cash flows from financing activities:                                                          
   Proceeds from issuance of notes payable                          5,000                     -
   Principal payments on long-term obligations and                                             
     notes payable                                                (6,403)               (8,239)
   Stock options exercised                                            586                 9,563
       Net cash provided by (used in) financing                                                
       activities                                                   (817)                 1,324
Foreign exchange effect on cash and cash equivalents                (670)                 1,080
Net increase in cash and cash equivalents                          30,892               148,569
Cash and cash equivalents, beginning of period                    516,360               593,601
Cash and cash equivalents, end of period                   $      547,252        $      742,170
                                                                                               
                                                                                    


1. General:

        The    accompanying   unaudited   consolidated   financial    statements
of   Gateway   2000,   Inc.  (the  "Company")  as  of   March   31,   1998   and
for   the   three   months   ended  March  31,   1997   and   1998   have   been
prepared   on   the   same   basis   as  the  audited   consolidated   financial
statements   as  of  and  for  the  year  ended  December  31,  1997   and,   in
the   opinion   of   management,   reflect   all   adjustments   necessary    to
fairly     state    the    consolidated    financial    position,    and     the
consolidated   results   of  operations  and  cash   flows   for   the   interim
period.   All   such   adjustments   are  of   a   normal,   recurring   nature.
The     results    for    the    interim    periods    are    not    necessarily
indicative   of   results  to  be  expected  for  any   other   interim   period
or   the   entire  year.   These  financial  statements  should   be   read   in
conjunction    with    the    Company's    audited    consolidated     financial
statements    and   notes   thereto   for   the   year   ended   December    31,
1997,   which   are   included  in  the  Company's   1997   Annual   Report   to
the    Securities    and    Exchange   Commission    on    Form    10-K.     The
preparation     of     the     consolidated     financial     statements      in
conformity    with    generally   accepted   accounting   principles    requires
management    to    make   estimates   and   assumptions   that    affect    the
reported     amounts    of    assets    and    liabilities,    disclosure     of
contingent    assets   and   liabilities,   and   the   reported   amounts    of
sales    and   expenses   during   the   reported   period.    Actual    results
could differ from those estimates.

2. Comprehensive Income:

     Effective   January   1,   1998,   the   Company   adopted   Statement   of
Financial     Accounting     Standards    (SFAS)     No.     130,     "Reporting
Comprehensive   Income."    SFAS   130   establishes   new   rules    for    the
reporting   of   comprehensive   income  and   its   components;   however   the
adoption   of   this   statement  had  no  impact  on  the   Company's   current
or   previously   reported   net   income   or   shareholders'   equity.    SFAS
130    requires   the   display   and   reporting   of   comprehensive   income,
which    includes    all   changes   in   shareholders'    equity    with    the
exception      of     additional     investments     by     shareholders      or
distributions    to    shareholders.     Comprehensive    income     for     the
Company     includes     net     income,    foreign     currency     translation
effects,     and    unrealized    gain    on    available-for-sale    securities
which     are    charged    or    credited    to    the    accumulated     other
comprehensive income account within shareholders' equity.
     
     Comprehensive   income   for   the   three   months   ended    March    31,
1997 and 1998 was as follows:
     
                                         Three Months Ended
                                              March 31,
                                         1997              1998
                                                   
                                            (in thousands)
                                             (Unaudited)
Comprehensive Income:                              
                                                   
Net Income                          $     67,516      $    75,871
Foreign Currency Translation             (1,402)            (252)
Unrealized gain on available-                                    
for-sale securities                            -              187
                                                                 
Total Comprehensive Income           $    66,114       $   75,806
                                                                 
                                     



3. Share and Per Share Information:
     
     In  1997,  the  Financial Accounting Standards Board  (FASB)
issued  Statement  of Financial Accounting  Standard  No.  128,
"Earnings  per Share" which replaced the calculation  of  primary
and  fully  diluted  earnings per share with  basic  and  diluted
earnings  per  share.  Unlike primary earnings per  share,  basic
earnings  per  share  excludes any dilutive  effect  of  options,
warrants and convertible securities.  Earnings per share  amounts
for all periods presented have been restated to conform with SFAS
128 requirements.
     
     The  following table sets forth a reconciliation  of  shares
used in the computation of basic and diluted earnings per share.
     

                                     Three Months ended March 31,
                                        1997               1998                                                 
                                           (in thousands)
                                             (Unaudited)
Net income for basic and                                         
  diluted earnings per share      $     67,516       $     75,871
Weighted average shares for                                      
  basic earnings per share             153,557            154,548
Dilutive effect of stock                                         
  options                                3,734              3,027
Weighted average shares for                                      
  diluted earnings per share           157,291            157,575
                                                                 

4. Selected Balance Sheet Information:

                                   December 31,        March 31,
                                       1997              1998
                                           (in thousands)
                                             (Unaudited)
Accounts receivable, net:                        
   Accounts receivable             $   530,743        $   488,412
   Less allowance for                                            
     uncollectible accounts           (20,064)           (16,529)
                                   $   510,679        $   471,883
                                                                 
Inventory:                                                       
   Components and subassemblies    $   215,318        $   150,129
   Finished goods                       33,906             35,276
                                   $   249,224        $   185,405


5. Contingencies:

       The   Company   is  a  party  to  various   lawsuits   and
administrative proceedings arising in the ordinary course of  its
business.  The Company evaluates such lawsuits and proceedings on
a case-by-case basis, and its policy is to vigorously contest any
such  claims  which it believes are without merit. The  Company's
management believes that the ultimate resolution of such  pending
matters  will  not  materially  adversely  affect  the  Company's
business,  financial  position, results  of  operations  or  cash
flows.

     Over the past several years, state tax authorities have made
inquiries  as  to  whether or not the Company's alleged  contacts
with  those states might require the collection of sales and  use
taxes  from customers and/or the payment of income tax  in  those
states.   The  Company evaluates such inquiries on a case-by-case
basis, and will vigorously contest any such claims for payment of
taxes  which  it  believes are without merit.   The  Company  has
favorably resolved these types of tax issues in the past  without
any  material  adverse consequences.  However, there  can  be  no
assurance  that the amount of any sales or use taxes the  Company
might  ultimately be required to pay for prior periods would  not
materially  affect  the Company's results of operations  or  cash
flows in any given reporting period.
     
     The  Company currently pays state income taxes in the states
where  it  has  a physical presence.  The Company  has  not  paid
income  taxes in other states, nor has it established significant
reserves for the payment of such taxes.  Management believes that
the  amount  of  any income tax the Company might  ultimately  be
required  to  pay  for  prior periods would  not  materially  and
adversely  affect the Company's business, consolidated  financial
position, results of operations or cash flows.
     
Item 2.   Management's Discussion and Analysis of Financial
Condition and Results of Operations

     This Report includes forward-looking statements made in good
faith  based on current management expectations pursuant  to  the
"safe  harbor"  provisions of the Private  Securities  Litigation
Reform Act of 1995. These statements are not guarantees of future
performance and actual outcomes may differ materially  from  what
is  expressed or forecasted.  There are many factors that  affect
the  Company's business and its results of operations,  including
the factors discussed below.

Results of Operations

      The  following table sets forth, for the periods indicated,
certain  data derived from the Company's consolidated  statements
of operations, expressed as a percentage of net sales:

                                        Three Months ended March 31,
                                           1997              1998
                                                     
Net sales                                  100.0%          100.0%
Cost of goods sold                          81.3%           80.5%
   Gross profit                             18.7%           19.5%
Selling, general and                                             
  administrative expenses                   12.0%           13.2%
   Operating income                          6.7%            6.3%
Other income, net                            0.6%            0.6%
   Income before income taxes                7.3%            6.9%
Provision for income taxes                   2.5%            2.5%
   Net income                                4.8%            4.4%

      Sales  Sales increased 22% in the first quarter of 1998  to
$1.73  billion from $1.42 billion in the first quarter  of  1997.
Sales  decreased 13% from the fourth quarter of  1997,  which  is
generally a seasonally stronger quarter.  The increase  in  sales
for the first quarter over the comparable period of 1997 resulted
primarily  from  healthy  demand  in  consumer  markets  and  the
expansion of Gateway CountrySM stores.

      Sales  in the Americas region for the quarter increased  to
$1.46 billion, an increase of 26% over the $1.16 billion recorded
in  the first quarter of 1997.  International sales in the  first
quarter  of  1998  increased  4% to $266.3  million  from  $256.2
million in the first quarter of 1997.  Sales for the quarter from
the Company's European region were $163.0 million, a decrease  of
approximately 8% from the first quarter of the prior year.  Sales
in  the Company's Asia Pacific region were $103.3 million in  the
first  quarter of 1998, an increase of 32% over the first quarter
of 1997.

     Unit shipments in the first quarter of 1998 increased 38% to
approximately 767,000 from 555,000 in the first quarter of  1997,
but  decreased 10% from unit shipments in the fourth  quarter  of
1997.   Shipments  of portable products increased  51%  over  the
first quarter of 1997, and represented 8% of total shipments.  In
the  Company's Americas region, unit shipments grew 43% over  the
first  quarter of 1997.  Unit shipments in the Company's European
and  Asia Pacific regions grew 4% and 47%, respectively, over the
first quarter of 1997.

     Weighted  average unit prices (AUP) in the first quarter  of
1998  were  approximately  12% lower than  prices  in  the  first
quarter of 1997 and 3% lower than prices in the fourth quarter of
1997.   Generally,  unit  prices for specific  PC  products  have
decreased  over  time, reflecting the effects of competition  and
reduced  component costs associated with advances in  technology.
The  Company has generally mitigated the impact of these declines
in component costs by adding or improving product features and by
introducing new products based on newer technology at higher unit
prices,  resulting in fairly stable unit prices over time.   When
the  timing  of  component  cost reductions  and  new  technology
introduction  is different, AUPs can fluctuate.  AUPs  throughout
the  first half of 1997 were fairly stable, but began to  decline
in  the third quarter of 1997 as component cost reductions  again
outpaced  the  introduction  of new technology.   This  declining
trend  has  continued throughout the fourth quarter of  1997  and
into the first quarter of 1998.

      Gross  Profit   Gross profit in the first quarter  of  1998
increased  27% from the first quarter of 1997, but  decreased  5%
from the fourth quarter of 1997.  As a percentage of sales, gross
profit  for  the  first  quarter of 1998 increased  to  19.5%  as
compared  to 18.7% and 18.0% in the first and fourth quarters  of
1997,  respectively.  Gross profit for the first quarter of  1998
improved  as the Company's direct marketing model benefited  from
continuing  component  cost  declines  and  the  improvement   of
inventory   turns.   During  the  first  quarter,   the   Company
particularly  benefited  from  its  suppliers'  lower   cost   of
manufacturing in the troubled Asia/Pacific region  and  by  over-
capacity in some segments of the component industry.

      Selling,  General  and  Administrative  Expenses   Selling,
general  and administrative (SG&A) expenses for the first quarter
of  1998  increased approximately 33% over the first  quarter  of
1997 and 6% over the fourth quarter of 1997.  As a percentage  of
sales, SG&A was 13.2% for the first quarter, as compared to 12.0%
and 10.9% in the first and fourth quarters of 1997, respectively.
Increases  over  the  comparable period in  the  prior  year  are
primarily  due  to  higher personnel and marketing  costs,  which
reflect the general growth of the business.  In comparison to the
fourth quarter of 1997, increases were primarily due to increased
customer  support costs, increased payroll taxes caused by  stock
option exercises, and higher than normal recruiting expenses.

      Operating  Income  Due to the factors discussed above,  the
operating  income in the first quarter of 1998 increased  15%  to
$109.2  million from $94.9 million in the first quarter of  1997,
but  decreased  by  22%  from $139.6 million  during  the  fourth
quarter of 1997.  As a percentage of sales, operating income  for
the quarter decreased to 6.3% from 6.7% and 7.1% during the first
and fourth quarters of 1997, respectively.

      Other  Income, Net  Other income, net includes other income
net  of expenses, such as interest income and expense and foreign
exchange  transaction  gains  and  losses.   Other  income,   net
increased to $9.3 million from $8.2 million in the first  quarter
of  1997  and  $7.0 million in the fourth quarter of  1997.   The
principal cause of the increase is the availability of additional
cash and marketable securities from the previous year's first and
fourth quarters causing increases in additional interest income.

      Income  Taxes  The Company's annualized effective tax  rate
was 36.0% for the quarter, compared to the 34.5% during the first
quarter  of  1997.   The  effective  tax  rate  for  1997,  after
eliminating  the impact of nonrecurring charges, was 35.5%,  with
the  increase  in  the  first quarter  of  1998  rate  reflecting
anticipated shifts in the geographic distribution of earnings.

Liquidity and Capital Resources

       The   Company  has  financed  its  operating  and  capital
expenditure  requirements to date principally through  cash  flow
from its operations.  At March 31, 1998, the Company had cash and
cash  equivalents  of  $742.2 million, marketable  securities  of
$66.8  million  and an unsecured committed credit  facility  with
certain banks aggregating $225 million, consisting of a revolving
line of credit facility and a sub-facility for letters of credit.
At  March  31,  1998,  no  amounts  were  outstanding  under  the
revolving  line  of  credit.   Approximately  $3.5  million   was
committed  to  support  outstanding standby  letters  of  credit.
Management  believes  the Company's current  sources  of  working
capital,  including  amounts  available  under  existing   credit
facilities,  will provide adequate flexibility for the  Company's
financial needs for at least the next 12 months.

     The Company generated $215.6 million in cash from operations
during the first quarter of the year, including $83.7 million  of
net  income  adjusted  for  non-cash  items.   Other  significant
factors contributing to the increase in available cash include  a
decrease  in  inventory levels and accounts  receivable  balances
generating $101.2 million.  The Company used approximately  $41.2
million in cash for facilities, equipment, and software and $28.1
million to purchase investments in marketable securities, net  of
proceeds of securities sold.

      At  March  31, 1998, the Company had long-term indebtedness
and  capital  lease obligations of approximately  $13.2  million.
These obligations relate primarily to the Company's expansion  of
international  operations and its investments  in  equipment  and
facilities.   Borrowings, exclusive of capital lease obligations,
bear  fixed and variable rates of interest currently ranging from
2.00%  to  8.87%  and have varying maturities through  2000.  The
Company's  capital  lease obligations relate principally  to  its
computer and telephone system equipment.

      The Company anticipates that it will retain all earnings in
the  foreseeable future for development of its business and  will
not distribute earnings to its stockholders as dividends.

 Year 2000

     The   Company  recognizes  the  need  to  ensure  that   its
operations  will not be adversely impacted by Year 2000  software
failures.  Software failures due to processing errors potentially
arising  from calculations using the Year 2000 date are  a  known
risk.
     
     In  1997,  the  Company created a corporate-wide  Year  2000
project team representing all business units of the Company.  The
Company's    Year   2000   remediation   efforts   include    the
implementation  of  upgrades to existing system  applications  as
well   as   the  addition  and  implementation  of   new   system
applications.
     
     The  Company  anticipates the implementation phase  of  this
project to begin no later than the second quarter of 1998 and  to
be  completed  by the second quarter of 1999.  If  the  necessary
modifications and implementations are not made on a timely basis,
the  Year 2000 issue could have a material, adverse effect on the
business,  consolidated financial position, results of operations
or cash flows of the Company.
     
     In  addition  to internal Year 2000 software  and  equipment
implementation  activities, the Company is in  contact  with  its
suppliers  to assess their compliance.  There can be no assurance
that  there will not be a material adverse effect on the  Company
if  third parties do not convert their systems in a timely manner
and  in a way that is compatible with the Company's systems.  The
Company  believes that its actions with suppliers  will  minimize
these risks.
     
     During  the  first  quarter of 1998,  the  Company  expensed
incremental costs of approximately $828,000 related to  the  Year
2000 remediation efforts, and has expensed $1.2 million on a life-
to-date basis.  The current total estimated cost to complete  the
Year  2000  remediation  efforts is  from  $10  to  $15  million,
exclusive of upgrades to existing applications and implementation
of   new  systems.   Internal  and  external  costs  specifically
associated with modifying internal-use software for the Year 2000
will  be charged to expense as incurred.  All of these costs  are
being funded through operating cash flows.
     
     The  Company's current estimates of the amount of  time  and
costs  necessary to implement and test its computer  systems  are
based on the facts and circumstances existing at this time.   The
estimates  were derived utilizing multiple assumptions of  future
events including the continued availability of certain resources,
implementation  success and other factors.  New developments  may
occur that could affect the Company's estimates for the Year 2000
compliance.  These developments include, but are not limited  to:
(a)  the availability and cost of personnel trained in this area,
(b) the ability to locate and correct all relevant computer codes
and  equipment,  and  (c) the planning and  modification  success
needed to achieve full implementation.  In addition, since  there
is  no  uniform definition of Year 2000 "compliance" and not  all
customer   situations  can  be  anticipated,  the   Company   may
experience an increase in warranty and other claims as  a  result
of the Year 2000 transition.

Factors That May Affect Future Results

      Factors that could cause future results to differ from  the
Company's  expectations  include the  following:  growth  in  the
personal  computer  industry;  competitive  factors  and  pricing
pressures;  component supply shortages; inventory  risks  due  to
shifts  in  market  demand; changes in the product,  customer  or
geographic  sales mix in any particular period;  the  outcome  of
pending  and  future litigation; access to necessary intellectual
property  rights;  changes  in  government  regulation;   foreign
currency fluctuations; risks of acquired businesses; and  general
domestic and international economic conditions.

      In  addition to other information contained in this Report,
the following factors, among others, sometimes have affected, and
in  the  future  could affect, the Company's actual  consolidated
financial  position, results of operations  or  cash  flows,  and
could  cause  future  results  to differ  materially  from  those
expressed in any forward looking statement made by, or on  behalf
of the Company.

     The Company has experienced, and may continue to experience,
problems  with  respect  to  the  size  of  its  work  force  and
production   facilities  and  the  adequacy  of  its   management
information and other systems, purchasing and inventory controls,
and  the forecasting of component part needs.  These problems can
result  in  high  backlog of product orders, delays  in  customer
support response times and increased expense levels.

      Short  product  life cycles characterize the  PC  industry,
resulting   from  rapid  changes  in  technology   and   consumer
preferences and declining product prices.  The Company's in-house
engineering  personnel work closely with PC  component  suppliers
and   other   technology  developers  to  evaluate   the   latest
developments in PC-related technology.  There can be no assurance
that the Company will continue to have access to or the right  to
use  new  technology or will be successful in incorporating  such
new technology in its products or features in a timely manner.

      Certain  key management employees, particularly Ted  Waitt,
Chairman  and  Chief  Executive Officer  and  a  founder  of  the
Company,  have been instrumental in the success of  the  Company.
The Company has not entered into an employment agreement with Ted
Waitt.   The  loss of Ted Waitt's services could  materially  and
adversely affect the Company.

     Over the past several years, state tax authorities have made
inquiries  as  to  whether or not the Company's alleged  contacts
with  those states might require the collection of sales and  use
taxes  from customers and/or the payment of income tax  in  those
states.   The  Company evaluates such inquiries on a case-by-case
basis, and will vigorously contest any such claims for payment of
taxes  which  it  believes are without merit.   The  Company  has
favorably resolved these types of tax issues in the past  without
any  material  adverse consequences.  However, there  can  be  no
assurance  that the amount of any sales or use taxes the  Company
might  ultimately be required to pay for prior periods would  not
materially  affect  the Company's results of operations  or  cash
flows in any given reporting period.

      The Company currently pays state income taxes in the states
where  it  has  a physical presence.  The Company  has  not  paid
income  taxes in other states, nor has it established significant
reserves for the payment of such taxes.  Management believes that
the  amount  of  any income tax the Company might  ultimately  be
required  to  pay  for  prior periods would  not  materially  and
adversely  affect the Company's business, consolidated  financial
position, results of operations or cash flows.
     
Item  2.a.  Quantitative and Qualitative Disclosures About Market
Risk
     
     There  has  not  been  a material change  in  the  Company's
exposure to foreign currency risks since December 31, 1997.

                     II.  OTHER INFORMATION

Item 1.   Legal Proceedings

       The   Company   is  a  party  to  various   lawsuits   and
administrative proceedings arising in the ordinary course of  its
business.  The Company evaluates such lawsuits and proceedings on
a case by case basis, and its policy is to vigorously contest any
such  claims which it believes are without merit.  The  Company's
management believes that the ultimate resolution of such  pending
matters  will  not materially and adversely affect the  Company's
business,  consolidated financial position, results of operations
or cash flows.

Item 2.   Changes in Securities and Use of Proceeds

      On  or  about  January 22, 1998, the Company issued  17,648
shares  of  Common  Stock to Jeff Weitzen as  a  stock  grant  in
conjunction with his employment as President and Chief  Operating
Officer of the Company.  The shares were issued to Mr. Weitzen in
a  transaction that was exempt from the registration requirements
of  the  Securities Act of 1933, as amended, pursuant to  Section
4(2) thereof.

Item 6.  Exhibits and Reports on Form 8-K

  (a)     Exhibits:

 Exhibit                  Description of Exhibits
   No.
  10.18   Amendment No. 1 to 1997 Amended and Restated Credit
          Agreement, dated as of January 19, 1998, among the
          Company, the banks party thereto, Norwest Bank Iowa,
          N.A., as Administrative Agent and Bank of America
          national Trust and Savings Association as
          Documentation Agent, filed herewith.
  27.1    Financial Data Schedule, filed herewith.

  (b)     Reports on Form 8-K:

      No Reports on Form 8-K were filed by the Company during the
quarter ended March 31, 1998


                            SIGNATURE

      Pursuant to the requirements of the Securities Exchange Act
of  1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                 Gateway 2000, Inc.


Date:  May 15, 1998              By:/s/ David J. McKittrick
                                    David J. McKittrick
                                    Senior Vice President,
                                    Chief Financial Officer and
                                    Treasurer (authorized
                                    officer and chief accounting
                                    officer)


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