News release

HP Discovers Design Flaw in Third-party Memory Modules Used in Notebook PCs Across the Industry

Company institutes voluntary replacement program to quickly service customers who may be affected by the issue

HP today announced that during routine testing of notebook PCs, the company identified a design flaw in certain notebook memory modules used across the industry that could potentially cause users to experience serious problems with their notebooks. The memory modules in question are not manufactured by HP and were supplied by third parties.

When used with a prevalent technology architecture found across the industry, the flawed memory modules could potentially result in blue screens, intermittent lock-ups or memory corruption. Some of these memory modules were incorporated in certain Compaq and HP notebook PC models.

To protect customers, HP is instituting a voluntary replacement program for those who have purchased Compaq or HP notebook PCs with the affected memory modules - at no cost to the customer.

"HP is the first technology company to publicly announce the existence of this problem -which we discovered by conducting our own ongoing and routine testing of our notebook products," said Ronald Kasik, director, Total Customer Experience Customer Engineering and Marketing, Personal Systems Group, HP. "We are taking immediate steps to notify customers, partners and our employees to rectify the situation as quickly as possible. While the probability of occurrence of this issue with the memory modules is low and dependent on the user's environment, we think it's important to notify our customers of this potential problem."

"When an industry problem like this occurs, vendors often gamble and hope the user won't realize it isn't a virus or the generic 'software problem' that has become an industry default," said Rob Enderle, principal analyst, The Enderle Group. "HP is one of the few companies that takes customer needs seriously and has the tools to identify and rectify the problems in a timely fashion. In this day and age it is refreshing to see a vendor value trust more than money."

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. For the four fiscal quarters ended April 30, 2004, HP revenue totaled $76.8 billion. More information about HP (NYSE, Nasdaq: HPQ) 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 Quarterly Report on Form 10-Q for the period ended Jan. 31, 2004, and HP's other Securities and Exchange Commission reports filed after HP's Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2003. HP assumes no obligation and does not intend to update these forward-looking statements.