News release

Compaq Takes Commanding Lead in Pocket PC Market

Compaq Computer Corporation (NYSE: CPQ) today announced that its extremely popular, award-winning iPAQ™ Pocket PC continues to fuel the company's next generation of Internet access with nearly half a million units shipped in the second quarter, giving Compaq a commanding lead in the Windows CE market.⁽¹⁾.

"If you've been waiting to buy an iPAQ Pocket PC, wait no more - there's never been a better time to buy an iPAQ," said Sean Burke, vice president and general manager, iPAQ Products and Connected Devices Division.

"The iPAQ Pocket PC is now available through all major commercial channels and retailers, and for the first time, the H3650 has been added to our own DirectPlus Web site for immediate purchase. We're also offering a 'Cash in Hand' $50 rebate on the iPAQ Pocket PC H3635," Burke continued.

Customers can be assured that any iPAQ Pocket PC purchased today is upgradable to future Pocket PC software—a feature unique to the iPAQ.

Industry analysts confirm the iPAQ Pocket PC's continuing appeal, particularly among business customers. "A growing number of new users and users who are upgrading want better messaging capabilities, such as access to e-mail, short message services, wireless LAN or integration of a PDA with a mobile phone," said Todd Kort, principal analyst of Gartner Dataquest's Computing Platform Worldwide group.

"Our projected numbers indicate the iPAQ Pocket PC overtook Palm in terms of revenue for the second quarter. We believe this is largely due to the product's appeal to corporate users because of its better connectivity with Microsoft programs like Outlook, Word and Excel, supplemented by its extremely strong multimedia and gaming capabilities," Kort added.

The Compaq iPAQ Pocket PC has been overwhelmingly popular since its introduction last year. The iPAQ was named The World's Most Powerful PDA by the Guinness Book of World Records, due to its outstanding set of features and its vivid, high-resolution color screen that can be seen in any light.

In addition, the iPAQ Pocket PC is the industry's most robust handheld product for wireless applications. Using flexible Expansion Packs supporting PC Cards or Compact Flash devices, customers can select the wireless solution that is right for them—including Compaq's own iPAQnet suite of wireless Internet solutions—while providing a migration path for future wireless technologies.

The iPAQ Pocket PC H3650, offering 32 megabytes of RAM standard, is now available for $499 on the Compaq DirectPlus Web site at http://www.directplus.compaq.com, or by calling 1-800-888-9909. Other models are also available, including the H3670 color unit with 64MB of RAM standard. For information on the H3635 "Cash in Hand" mail-in rebate, please see http://athome.compaq.com/showroom/static/promo/cashinhand/index.asp.

Company Background

Founded in 1982, Compaq Computer Corporation ("Compaq") is a leading global provider of enterprise technology and solutions. Compaq designs, develops, manufactures and markets hardware, software, solutions and services, including industry-leading enterprise storage and computing solutions, fault-tolerant business-critical solutions, communication products, and desktop and portable personal computers that are sold in more than 200 countries. Information on Compaq and its products and services is available at http://www.compaq.com.