News release

Compaq Announces Free Upgrade to Pocket PC 2002 for iPAQ Pocket PCs Purchased Between Now and November 30th

Compaq Computer Corporation (NYSE: CPQ) today announced a free upgrade⁽¹⁾ to Pocket PC 2002 for the iPAQ™ Pocket PC, the award-winning Pocket PC that can be upgraded to the newest handheld PC software from Microsoft. The free upgrade is available for any iPAQ Pocket PC purchased between September 6 and November 30, 2001. After that, owners of iPAQ Pocket PCs will be able to upgrade their devices for $29.95⁽²⁾.

Through its built-in Flash ROM (Read-Only Memory) capability, the iPAQ Pocket PC can take advantage of the new Pocket PC 2002 software in a user-friendly upgrade process. Compaq has worked with Microsoft to give iPAQ Pocket PC customers the full benefit of Pocket PC 2002 through a combination of ROM Upgrade and RAM-installable applications.

"We are proud to offer this outstanding program for our customers which gives them the best of both worlds—the most powerful Pocket PC in the industry, and an upgrade to the latest Pocket PC software from Microsoft," said Sean Burke, vice president of the iPAQ Products and Connected Devices Division, Compaq Computer Corp. "The iPAQ Pocket PC offers a unique combination of easy upgradability and the latest software, demonstrating our commitment to protecting our customers' investment in the most popular Pocket PC in the industry."

Pocket PC 2002 offers iPAQ Pocket PC users improved Pocket PC features, the most compelling handheld software for enterprise environments, and technology that provides for the broadest selection of wireless connectivity in the industry. By simply installing the upgrade utility from the upgrade CD⁽³⁾ onto the host computer, the software is quickly and easily loaded onto the iPAQ Pocket PC.

The Compaq iPAQ Pocket PC 2002 Free Upgrade promotion requires customers to submit a proof of purchase. A link to information and mail-in forms will be available on http://www.compaq.com/products/handhelds/pocketpc/ on September 17th. Customers who request the free upgrade will receive a CD in the mail, shipments will begin in mid-October.

Any iPAQ Pocket PC purchased prior to September 6th can be upgraded for $29.95 plus shipping, handling and tax. See http://www.compaq.com/products/handhelds/pocketpc/ for details. The iPAQ Pocket PC is widely available worldwide through authorized retailers, channel partners and on the http://www.compaq.com Web site.

Broad Industry Support

In addition to the Microsoft Pocket PC 2002 upgrade offer, Compaq also recognized a growing list of industry solutions available for the iPAQ Pocket PC. The iPAQ Pocket PC enjoys tremendous industry support, as evidenced by the growing number of solutions and tools featuring the sleek Compaq handheld device. Compaq lists these industry solutions at www.compaq.com as a service to customers. Recent additions include:

• The Toshiba 1.8-inch 5GB hard disk drive, which allows users to carry large volumes of data with them, such as a library of manuals, video and music files, photos, and more.
• The 1GB IBM Microdrive, which provides ample storage space for music, backup files, and special applications—in a tiny CompactFlash Card size. The 1GB Microdrive brings affordable high-capacity, high-performance data storage to a wide variety of handheld electronic products.
• TravRoute's® Pocket CoPilot™ GPS, which turns the iPAQ Pocket PC into a GPS navigation system, providing detail, accuracy, and convenience for people who need directions.
• Other additions to the list include wireless modems for wireless networks in several countries, cell phone cables, storage, and an extended battery. Visit http://www.compaq.com/products/handhelds/pocketpc/compatiblehw.html for more information about these and other useful accessories for the iPAQ Pocket PC.
• Compaq has also developed useful tools for developers, including a full-duplex driver. This driver enables software companies to develop useful telephony solutions, such as Voice Over IP. Companies who have recently announced such solutions include UgotACall, Newmad Technologies, and IPBlue.

Compaq 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.