2 Amigos, 1 Amiga

The mysterious Paul Allen, a Gateway subsidiary and Linus Torvalds figure in an evolving Valley drama.

By Josh McHugh

August 9, 1999

NAME-DROPPING, code-writer-style: "I was sharing stories with Linus recently about having too many e-mails in my inbox...."

James Collas, name-dropper and chief executive of Gateway subsidiary Amiga Inc., has been swamped by a torrent of e-mail since he announced in early July that the new version of the Amiga computer, due out this fall, will use Linux, Finnish programmer Linus Torvalds' brainchild, as its operating system.

In the past year just about every major software and hardware company except Microsoft has climbed on the Linux bandwagon, but the excitement about the Amiga is especially intense for a couple of reasons.

First, the Amiga computer, a technically advanced machine that has survived two corporate bankruptcies since its 1985 debut, still has a devoted following of thousands who may finally have their day in the sun.

Second, the move looks like a clue in the Silicon Valley obsession with what exactly Torvalds' shadowy employer, Transmeta, is up to.

The Amiga has been something of a technological Hope diamond, an exquisite object that has brought bad luck to each of its corporate owners. Amiga, founded in 1982 and funded by a trio of dentists, ran out of cash in 1984. Commodore picked it up, only to go bankrupt itself in 1994. Germany's Escom bought Commodore from liquidators and went under in 1996.

But the Amiga faithful kept the machine alive, putting up hundreds of Amiga Web sites and writing new software for the box. Gateway bought the rights to all Amiga patents and trademarks in 1997. The Amiga's impending resurrection as an "information appliance" is the computer world's version of the return of the Volkswagen Beetle.

Gateway's interest in this artifact owes to more than nostalgia.

"You can do stuff with a ten-year-old Amiga running on a 14-megahertz processor that you can't do on new PCs," says Collas, who left his job as Gateway's senior vice president of new products in 1999 to head Amiga.

The specialized set of chips augmenting the Motorola microprocessor inside the Amiga have long allowed this computer to do more in the way of graphics and sound with less central processing power than a comparably priced Intel-based PC. The upcoming version of the Amiga will let Gateway offer a low-priced computer aimed squarely at multimedia "convergence," the Holy Grail being chased by, among others, Transmeta investor Paul Allen.

Transmeta has baffled the high-tech press and curious engineers alike with a veil of secrecy for the past two years. In addition to Torvalds, the company has hired a high-profile videogame programmer, but two patents it has filed indicate that Transmeta is designing processors. That notion is bolstered by the fact that until recently Paul Allen's "Wired World" Web site described the company's business as: "Alternative VLSI engines for multimedia PCs."

Multimedia boxes are precisely what Allen needs to deliver the digital content he's been investing in ($500 million in DreamWorks, $100 million in Oxygen Media, etc.) over the cable systems he's been amassing.

Rumors about the Amiga's using Transmeta's wares hit the Internet a year ago. A July report in a British publication cites Collas as putting Transmeta on a short list of potential partners. Mal Raddalgoda of QNX, the Canadian company whose operating system was cast aside in favor of Linux, says Amiga and Transmeta are in cahoots.

Collas, sounding cornered, says only: "I can neither confirm nor deny it." Torvalds, though he has high praise for the Amiga, is mum.

If nothing else, the aura of mystery should add to the Amiga's appeal among the cognoscenti.

Copyright 1999 Forbes.com