News release

HP Unveils Consumer Strategy to Deliver Rewarding Experiences through Simplified Technology

"Enjoy more" strategy backed by company's largest consumer offering ever — more than 100 products spanning digital photography to digital home entertainment solutions

HP (NYSE:HPQ) today announced a strategy to radically simplify technology to help people "enjoy more" - a move that extends HP's leadership in imaging, printing and home computing into the fast-growing digital photography and entertainment markets.

As part of the strategy and in direct response to complex proprietary systems that have led the consumer electronics landscape for years, HP unveiled more than 100 consumer products designed to easily bring digital photos, music and video to life in new and enriching ways.

"Today marks a new beginning for consumers who have been turned off by complicated technology," said Carly Fiorina, HP chairman and chief executive officer. "HP is using its unparalleled consumer knowledge and technical inventiveness to cut through the complexity and make technology a positive ingredient in people's lives - a way to connect, discover, entertain and get more things done.

"Our vision is simple: place you, the consumer, at the center of the digital experience by making technology that is simple, fun to use, and works better together."

HP kicked off the initiative, which extends beyond products and technology to include services and retail concepts that will transform consumers' shopping, buying, and service and support experience, by announcing:

• Its most extensive digital photography line-up ever - including the industry's first consumer eight-ink photo printer with studio grade photo paper that surpasses traditional photography on image quality and fade resistance, and a new low cost, glossy everyday photo paper;
  
  
• Groundbreaking digital home entertainment devices that consumers can use to manage, store and enjoy music, video, photos and other digital content throughout the home and beyond;
  
  
• HP Total Care, a comprehensive consumer support and services program, that includes 24x7 toll-free phone support in multiple languages and same-day local PC repair(1); and
  
  
• Retail experience centers - developed with Microsoft Corp. and key U.S. retailers including Circuit City, J&R ComputerWorld, Micro Center and CompUSA - that offer real-world scenarios and demonstrations to help customers select the best equipment to meet their digital entertainment, digital photography and home office productivity needs.
  
  
• Set up in dedicated physical spaces, the centers will be staffed with specially trained sales representatives to guide, educate, excite and sell to customers. Stores also will host customer workshops, teaching consumers how to improve their digital lifestyles.

Already the world's leader in consumer IT, HP is expanding its leadership within the fastest-growing consumer digital imaging and entertainment markets.

"If technology companies want to get more consumers to adopt their solutions, they have to not only deliver innovative, easy-to-use, interoperable products, but also focus on how those products contribute to the overall consumer experience," said Danielle Levitas, director of consumer devices and technologies, IDC. "Consumers use technology because they enjoy digital photography, digital music and/or digital video. The challenge is to seamlessly integrate technology into their passion - and HP is providing compelling solutions to consumers."

Simplifying Home Photography

With surveys showing that more than 80 percent of digital camera users print their digital photos at home (InfoTrends' 2003 Digital Camera Survey), HP is responding with a revamped digital photography line that makes the production of affordable, high-quality digital photos easy and convenient. Highlights include:

• The HP Photosmart 7960 photo printer combined with the new HP 59 gray photo inkjet print cartridge - the world's first eight-ink consumer photo printer that delivers professional-quality photo printing for stunning color and black and white prints.
• The HP PSC 2510 Photosmart all-in-one - the industry's first all-in-one printer with built-in wireless functionality to provide the convenience of a mini-photo lab at home. Consumers can print, scan, fax and copy in one easy-to-use device.
• HP Image Zone imaging and printing software - which will come with all HP Pavilion PCs and HP Photosmart imaging and printing devices - to provide seamless integration for taking, viewing, editing, printing and storing digital photos. The simple-to-use software also includes the industry's first auto digital negatives feature for lasting protection.
• The HP Scanjet 4670 see-through vertical scanner - featuring a breakthrough ultra-thin design that allows users to see what they are scanning through clear glass to capture hard-to-scan items such as newspapers, maps or books.
• The HP Deskjet 9650 photo printer - delivering vivid photos up to 13 x 19 inches in size.
• HP Everyday Photo Paper - priced as low as 10 cents a sheet for 4 x 6-inch size and 15 cents for 8 x 10-inch size.
• The HP Photosmart 945 digital camera - featuring HP's exclusive Adaptive Lighting Technology that permits the camera to reproduce on paper what you see with your eyes, balancing the contrast between darkness and light. The camera captures detailed photos and achieves outstanding enlargements with 5.3-megapixel total resolution and 56x total zoom.
• The HP Photosmart Mobile Camera for the HP iPAQ Pocket PC - offering industry leading image quality with HP Photosmart image processing technology for a Pocket PC camera accessory. The device enables users to snap, share and print images directly from iPAQ Pocket PCs.

HP Extends Into Digital Home Entertainment

HP is positioned to lead in the digital entertainment arena, focusing on the segment of the market where the computing and home entertainment worlds converge into a new space. HP is bringing the processing power of PCs to a variety of home entertainment devices creating simple-to-use, rewarding entertainment experiences that enable people to enjoy their digital content in new ways.

Leveraging its strengths in home computing, imaging and storage, HP announced groundbreaking products for digital entertainment enthusiasts, including:

• The HP DVD Movie Writer dc3000 - the first of its kind in the industry - which can turn VHS tapes into long-lasting DVDs and preserve precious video memories for future generations.
• The HP Pavilion Notebook zd7000 series, converging digital entertainment, photography and Internet computing in a widescreen notebook design with desktop comfort.
• The HP Notebook Expansion base, providing a cord-free desktop work area with a wireless desktop-size keyboard and optical mouse. With a smaller footprint and increased performance, this expansion base ensures a better desktop experience.

Satisfying Customers Through Award-winning Service and Support

HP has steadily increased customer satisfaction rates over the past year and has now implemented a new and innovative support and services program called HP Total Care. The program offers customers greater options for convenient support, including industry-leading one hour e-mail response; 24x7 toll-free speech-enabled telephone support in English, Spanish⁽²⁾ and French⁽³⁾; built-in product support options for computing products; easy-to-access online diagnostic tools and downloadable drivers; and enhanced repair options with faster turnaround times for computing products.

With HP Total Care, specialized agents are easier than ever to reach via phone, web or e-mail and, with 12-14 weeks of technical and soft-skills training, they are well-versed to understand as much as possible about the customer and their products, meaning faster response times and increased first time resolution rates.

Pricing and Availability

Additional information, pricing and availability details are available in an online press kit at http://www.hp.com/go/consumerstrategy or at http://www.hpshopping.com.

About HP

HP delivers vital technology for business and life. The company's solutions span IT infrastructure, personal computing and access devices, global services and imaging and printing for consumers, enterprises and small and medium business. For the last four quarters, HP revenue totaled $70.4 billion. More information about HP is available at http://www.hp.com.

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 and performance 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 April 30, 2003, and subsequently filed reports. 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 to update these forward-looking statements.