News release

HP Leads Market Shift to All-in-one Printers

Devices' Breakthrough Technologies Provide Value, Convenience and Photo-quality Output for Home and Home/Offices

PALO ALTO, Calif., Aug. 26, 2002

HP (NYSE: HPQ) today announced a new family of all-in-one printers designed from the ground up to meet the changing needs of consumers. The company's all-in-one lineup offers consumers breakthrough print, scan and copy technologies that historically have been reserved for the newest single-function devices.

With a compact, modern design, affordable prices and industry-leading photo quality, the new HP PSC 2110 and HP PSC 2210 all-in-one printers round out the company's largest product rollout of personal printing and digital imaging products this year.

According to the most recent Gartner Dataquest report, sales of all-in-ones grew 98 percent in the first quarter of 2002 compared to the same period of 2001.⁽¹⁾

"This trend toward (all-in-ones) puts vendors that market (printers and all-in-ones) in a strong position for future growth and profits," said David Haueter, senior industry analyst, Gartner, Inc. "As digital camera sales grow to 8.32 million in the U.S. in 2002 and photo printing at home increases, the flatbed inkjet (all-in-one) is in a perfect position to reap the benefits."

"After listening to consumers' needs, HP is delivering a full range of digital imaging products that produce photos that look like they were developed by a professional photo lab," said Larry Lesley, senior vice president, HP Personal Printing. "With these all-in-ones we've built on our printing and imaging heritage and expertise to bring consumers -- without compromise -- the latest print, scan, fax and copy technologies in one convenient and affordable device."

Product Features

• Up to 4,800 x 1,200-optimized dots per inch (dpi)⁽²⁾ for clearer, brighter and sharper photo-quality printing;
• Color layering technology from Photoret IV -- HP's innovative photo resolution enhancement technology that delivers true-to-life digital photos and fast, professional results for brilliant everyday color printing (Photoret IV with optional photo cartridge only);
• Six-ink printing with an interchangeable photo cartridge;
• Exclusive and enhanced HP Photo Proof Sheet technology to print faster -- select a border and choose the size of your printed photo from one device without involving your computer;
• Non-PC printer options -- the HP PSC 2210 all-in-one allows you to print directly from your digital camera's memory card, such as Compact Flash, Secure Digital, SmartMedia and Sony Memory Stick;
• Fast print speeds -- the HP PSC 2110 all-in-one prints up to 14 pages per minute (ppm) in black while the HP PSC 2210 prints up to 17 ppm in black;
• Premium photo supplies -- photos resist fading for generations with optional six-ink printing when used with HP Premium Photo papers;
• Small, convenient, innovative design;
• Fast, convenient flatbed faxing in black or color for sending short faxes and receiving faxes of any length.

Consumers also can print borderless photos on HP's 4 x 6-inch HP Premium Photo paper and can reduce and enlarge the size of an original copy from 25 to 400 percent, making these devices ideal for the home or office.

With HP's recently introduced Premium Photo Papers and enhanced HP inkjet cartridge technology, consumers can easily capture and print images that rival the quality and color of traditional photos and will last for generations.

U.S. Pricing and Availability

The HP PSC 2110 and HP PSC 2210 all-in-one printers are expected to ship to U.S. retailers within the next four weeks. The HP PSC 2110 all-in-one will sell for an estimated U.S. retail price of $249 and the HP PSC 2210 all-in-one will sell for an estimated U.S. retail price of $399.⁽³⁾

Both products come with a one-year limited warranty backed by HP Customer Care service and support and are available direct from HP via http://www.hpshopping.com or at consumer electronics stores nationwide.

About HP

HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. HP completed its merger transaction involving Compaq Computer Corp. on May 3, 2002. The company would have had revenue on a combined company basis with Compaq of approximately $81.1 billion in fiscal 2001 and has operations in more than 160 countries. More information about HP is available at http://www.hp.com.

⁽¹⁾ Gartner, Inc. Alert, "U.S. Inkjet Printers Slow as All-In-Ones Grow in First Quarter 2002," June 11, 2002, David Haueter and Andrew Johnson.

⁽²⁾ Up to 4,800 x 1,200-optimized dpi color printing on premium photo papers when printing from a computer and 1,200 x 1,200-input dpi.

⁽³⁾ Actual prices may vary.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the possibility that the market for the sale of certain products and services may not develop as expected; that development of these products and services may not proceed as planned; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to, HP's quarterly report on Form 10-Q for the quarter ended January 31, 2002 and reports filed subsequent to HP's annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, HP's results could differ materially from HP's expectations in these statements. HP assumes no obligation and does not intend to update these forward-looking statements.