News release

New Compaq PCs Set Threshold for Most Secure and Confident Internet Purchasing Experience

Compaq Computer Corporation (NYSE: CPQ) today introduced the most innovative Internet platform available for secure and convenient online shopping, including Smart Credit Card Internet keyboards, Coloreal™ color management technology and Norton Internet Security 2001 software for Presario desktop PCs.

"These advanced capabilities in Internet purchasing security and services are examples of solutions our customers have told us are important to them in their personal and professional lives," said Alex Gruzen, vice president and general manager for Home and Office Access in Compaq's Access Business Group. "Our market research continues to indicate the best way to enhance and expand the value of the Presario brand is by developing solutions that offer the highest level of e-commerce security and technology that makes Internet purchasing more simple."

Compaq announced the Smart Credit Card Internet Keyboard on select product offerings, featuring an integrated smart card terminal powered by Gemplus technology that provides the most advanced, innovative Internet experience for safe and convenient online purchasing. The first PC provider to be deemed by Visa as "smart Visa Ready," Compaq has partnered with Visa and Fleet Credit Card Services, a subsidiary of FleetBoston Financial, to provide customers with a complete solution, including an offer for the Fusion™ smart Visa^® credit card.

"This initiative paves the way for mainstream consumer adoption and use of smart cards in the United States," said Patrick Gauthier, senior vice president, Smart Card Applications and Market Development, Visa U.S.A. "Much like the advent of CD-ROM drives being built into PCs and the resulting explosion in consumer use, Compaq's decision to include smart readers into their PCs will build customer awareness and demand for smart cards."

A smart credit card uses an embedded microprocessor chip to deliver new levels of security, convenience, control and value to card holders. Users simply insert their smart credit card into the smart card terminal on the new keyboard and enter a password. Only after the smart chip within the card validates the user's password will the encrypted purchasing information be passed to the participating "smart Visa" online merchant, making it virtually impossible for credit card data to be intercepted.

"This online purchasing solution created by the Fusion smart Visa credit card and Compaq Smart Credit Card Internet Keyboard not only takes online purchasing to a secure new level, but can also open exclusive promotions and savings to smart card users," said Jay H. Lee, senior vice president at Fleet Credit Card Services. "We at Fleet are proud to be a leader in the smart card industry. We are pleased to offer a new red Fusion smart Visa card in conjunction with this online purchasing solution. Consumers can find out more about this card, and even apply, at http://compaq.fusioncard.com."

More than 42 million Visa smart cards are already in use globally, making it a logical technology solution to incorporate into the new Presario desktop lineup. Many major retailers, most recently Target stores, employ smart card technology to protect and better service online consumers.

A smart credit card offers the most advanced technology available in a credit card today, enabling convenience and, where available, can provide benefits such as reduced fraudulent charge-backs to customers; automatic population of name, address and other information during online checkout; accumulation of reward points and storage of e-coupons on the smart chip for online and offline use. Shipping with select Presario 5000 and 7000 models beginning June 27, the Compaq Smart Credit Card Internet Keyboard also features customizable one-touch buttons for instant access to favorite online sites, including a dedicated "Smart Credit Card Zone" button that provides consumers with information on smart credit cards and an online application for the Fusion smart Visa card. The "Smart Credit Card Zone" also provides access to a shopping portal featuring a multitude of online merchants. For more information on the Smart Credit Card Internet Keyboard solution, visit http://www.athome.compaq.com.

And to ensure images viewed during online shopping are true-to-life, Compaq will be the first major technology provider to ship all of its new systems enabled with WayTech Development's Coloreal color management technology. The Coloreal technology system is a maintenance-free solution that runs seamlessly on the PC without affecting Internet download speeds or the need for user intervention. In addition, Compaq today also announced its new IJ650 color inkjet printer, which supports true color output from Coloreal-enabled Web sites when images are printed on Compaq branded photo paper.

"We are delighted to have this agreement with one of the premier companies in the world," said Joe Mintz, president of WayTech Development, USA. "We are confident that the product we are bringing to the marketplace is the best solution to the vexing problem of color consistency on the Internet and will enhance a consumer's online shopping experience."

More than 30 percent of online shoppers report returning a purchase because the actual color of the item was not as expected. Coloreal ensures accurate color matching from the Internet to a PC, allowing users to view the true color of clothing and other objects viewed online from Coloreal-enabled Web sites. WayTech's unique Coloreal technology system solves the Internet color problem at the manufacturing level by relying on three components working together: a Coloreal enabled monitor, a PC and a Web site.

With Coloreal, Web shoppers can be confident the shirt they bought, the home they virtually toured, or any other item viewed at a Coloreal site will be the same color in real life. From Big Dogs Sportswear and MAXSTUDIO.COM to Volkswagen, Flower.com and Novica.com, in association with National Geographic, more than 40 major retailers plan to support the Coloreal program.

"Coloreal software provides us a solid color-management solution. By providing a closed loop between what we post on our site and our customer's monitor and CPU, we virtually guarantee that the color our customer sees online at BIGDOGS.com is the same as what they see when they open the package at home. We want to always deliver what we promise—it's how we develop a loyal Big Dogs customer. And it translates into a low return rate and increased profitability," Patrick Stewart, marketing director, Big Dogs Sportswear.

To learn more about Coloreal, and for a full list of Coloreal-enabled merchants, visit http://www.coloreal.com.

To complete Compaq's software security suite, as of June 27, all Presario PCs will be shipped with Norton™ Internet Security 2001 software, providing consumers the confidence that their privacy and important information are protected from Internet threats. This comprehensive software suite includes Norton Personal Firewall to defend against hackers and award-winning Norton Anti-Virus to eliminate dangerous viruses. It also lets customers keep personal information private, control Internet "cookies," and block banner ads to accelerate download speeds with Norton Privacy Control.

The breadth of these new offerings from Compaq is available at Compaq's Web site at http://www.compaq.com/athome, by calling 1-800-888-0220 and through Compaq kiosks located in more than 10,000 popular retail stores.

(Editor's Note: Please see today's related announcement, "Compaq Unveils Innovative Productivity Tools for Internet-Driven Home and Home Office," unveiling Compaq PC enhancements as well as a new PC form factor, printer, scanner and other tools for the home and home office.)

About Compaq

Compaq Computer Corporation, a Fortune Global 100 company, is a leading global provider of technology and solutions. Compaq designs, develops, manufactures, and markets hardware, software, solutions, and services, including industry-leading enterprise computing solutions, fault-tolerant business-critical solutions, and communications products, commercial desktop and portable products, and consumer PCs that are sold in more than 200 countries. Information on Compaq and its products and services is available at http://www.compaq.com.