News release

HP Broadens e-PC Reach with Launch of Second-generation e-PC SMB e-PC Builds on Success of Corporate e-PC, Delivers Integrated Internet Tools, E-services and Customization Accessories to Small Businesses

PALO ALTO, Calif., Oct. 10, 2000

Hewlett-Packard Company (NYSE: HWP) today expanded its e-PC market reach with the launch of the SMB e-PC in 20 countries worldwide. Building on the success of HP's corporate e-PC ¹, the second-generation e-PC is bringing to small businesses the powerful benefits of the corporate e-PC's integrated Internet tools and e-services.

HP, which also today launched a range of e-PC Universal Serial Bus (USB) accessories enabling customization for specific business tasks, continues to provide its customers with the building blocks of the e-services economy. The company began shipping the HP corporate e-PC in April of this year and expects to have shipped 500,000 to a range of sectors, including retail, IT and financial services, by April 2001.

"HP continues to reinvent the PC so our customers can focus on taking care of business and their customers, not on technology," said Eric Cador, vice president and general manager, HP Business Desktop Division. "We will continue to extend the e-PC to untapped markets that will benefit most from the e-PC's simplicity, security and ease-of-use."

The e-PC is only one-quarter the size of a traditional desktop PC, and half the size of competitive offerings. The redesigned e-PC features a 15-inch, flat-panel monitor ideal for environments where space is at a premium. HP has measured a failure reduction rate of 35 percent from the improved hardware reliability alone, and estimates that this figure can increase dramatically with the installation of Microsoft® Windows® 2000.

HP SMB e-PC

HP's latest addition to the e-PC line is equipped with additional features tailored to the needs of small businesses. They include:

• The HP USB e-modem -- One of the industry's smallest, the HP e-modem is bus-powered, eliminating the need for bulky power cables, and locks securely into the e-PC.

• The HP e-center² -- An interface providing one-click access to a broad assortment of Web-based services that enables small businesses to connect to the Internet, access business information and develop their e-business.

• Integrated e-services -- Bundled with the SMB e-PC, the HP Internet keyboard provides one-touch access to the Internet, business applications and the HP e-center, as well as to localized HP business and IT services.

HP e-PC Accessories

The e-PC accessories suite provides external expandability for ultimate flexibility. Swappable between models, they enable users to customize the e-PC for specific tasks. The suite comprises:

• 15-inch flat-panel monitor/e-PC integration kit -- The flat-panel monitor was designed specifically for integration with the e-PC family via a specially designed adapter. Since the monitor and e-PC can either work together or independently, businesses can swap components between users as needed.

• HP USB wireless LAN adapter and small business access point -- Based on the 802.11b industry standard, the wireless LAN adapter and access point allow for shared Internet access for up to 15 e-PCs, lowering infrastructure costs and providing scalability for growing businesses.

• HP USB compact flash reader - This provides ultra-fast image and data transfer, and links the e-PC to other information appliances.

• HP USB CD-writer - A sleek, high-performance solution for writing and rewriting CDs.

Warranty, Service and Support

The HP e-PC includes an industry-leading warranty, service and support package, as well as HP e-Diag Tools, HP's Web-enabled diagnostics application for fast and efficient hardware troubleshooting. Online support is available through the HP e-PC support Web site at http://www.hp.com/go/e-pcsupport.

Pricing and Availability

The HP e-PC is available through HP resellers and at http://www.bstore.hp.com. Estimated U.S. street prices begin at $659³.

About HP

Hewlett-Packard Company -- a leading global provider of computing and imaging solutions and services -- is focused on making technology and its benefits accessible to individuals and businesses through simple appliances, useful e-services and an Internet infrastructure that's always on.

HP has 86,000 employees worldwide and had total revenue from continuing operations of $42.4 billion in its 1999 fiscal year. Information about HP and its products can be found on the World Wide Web at http://www.hp.com.

²Available in the United States, UK, France, Germany, Italy, Netherlands and Spain only.

³Actual prices may vary.

Microsoft is a U.S. registered trademark of Microsoft Corp.

Windows is a U.S. registered trademark of Microsoft Corp.

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In addition, the press releases may contain statements that are forward-looking. These statements are based on current expectations as of the date of a particular release. Actual results may differ materially from those projected because of a number of risks and uncertainties, including those detailed from time to time in HP's reports filed with the Securities and Exchange Commission. Click here to review these important factors that could cause results to differ materially from those in any such forward-looking statements.