News release

HP and Philips to Drive Adoption of Second Generation RFID Solutions

Gen2 RFID technology enables seamless migration and global interoperability across multiple industries

HP and Royal Philips Electronics today announced that they are partnering to accelerate the adoption of the latest global RFID standard, which is designed to provide customers with interoperable technology, solutions and services for migration from previous RFID standards.

This new global EPC Class 1 Generation2 (Gen2) standard allows a single tag to now travel globally and still be read by most readers, something that wasn't previously possible. For example, most first-generation Class 1 RFID tags used in the United States cannot be read in Europe due to bandwidth limitations. Gen2 makes it possible to track a tag sent from the United States through Europe with ease.

Having already successfully embraced RFID technology in their respective supply chains, both companies will leverage their complementary leadership in RFID chip development, business process design and systems integration to further drive adoption of Gen2 RFID technology. Announced at the EPC Global Conference, the joint effort is primarily focused on the consumer products/retail, high-tech and pharmaceutical industries.

"As RFID technology continues to evolve, a needs-focused analysis of business processes, systems architecture and resource capabilities is required to identify the investment options available for an RFID strategy," said Mike Witty, program director, Manufacturing Insights. "Enterprises want to leverage their existing RFID investments without sacrificing the benefits offered by Gen2."

The goal of the HP and Philips collaboration is to ensure that adopters of RFID achieve a seamless migration from the previous infrastructure while capitalizing on the global interoperability and increased performance that Gen2 offers.

A key part of the collaboration will take place at HP's Sao Paolo, Brazil facility, where testing of advanced RFID supply chain concepts occurs and through which new technologies are introduced to HP's vast supply chain. HP will use Philips' Gen2 RFID technology at the location, replacing the UCODE EPC 1.19 currently in use. HP plans to use the Philips technology in other locations in the future.

"By working closely with Philips, HP will help assure customers that Philips Gen2 chips and their existing solutions work together effectively," said Frank Lanza, worldwide director, RFID, HP Services. "As a result, customers will be more able to achieve the cost-savings and strategic advantage offered by next-generation RFID technologies."

A leading provider of RFID chip technology, Philips has applied its depth of expertise and industry relationships to ensure interoperability of its Gen2 solutions with those of both its partners and competitors, encouraging market adoption.

Through its extensive knowledge and background in RFID technology development and systems integration, both for customers and in its own business operations, HP helps customers implement Gen2 solutions to achieve a manageable, reliable and cost-effective RFID solution framework.

"Philips and HP have a legacy of complementary solutions and collaboration. By joining forces to drive industry standardization and system optimization, we're breaking down the barriers to wide-scale adoption of Gen2 technology," said Christophe Duverne, vice president, Marketing and Sales, Business Line Identification, Philips Semiconductors. "Supply chain management is key to the success of companies in the retail and high-tech industries and being able to easily implement the Gen2 technology will help give them a competitive edge."

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 30.3 billion in 2004. With activities in the three interlocking domains of healthcare, lifestyle and technology and 160,900 employees in more than 60 countries, it has market leadership positions in medical diagnostic imaging and patient monitoring, color television sets, electric shavers, lighting and silicon system solutions. News from Philips is located at http://www.semiconductors.philips.com.

About HP

HP is a technology solutions provider to consumers, businesses and institutions globally. The company's offerings span IT infrastructure, global services, business and home computing, and imaging and printing. For the four fiscal quarters ended July 31, 2005, HP revenue totaled $85.2 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 and uncertainties, as well as assumptions that, if they ever materialize or prove incorrect, could cause the results of HP and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including the expected development, performance or rankings of products or services; statements of expectation or belief; and any statement of assumptions underlying any of the foregoing. Risks, uncertainties and assumptions include the development, performance and market acceptance of products and services 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 fiscal quarter ended April 30, 2005, and other reports filed after HP's Annual Report on Form 10-K for the fiscal year ended Oct. 31, 2004. HP assumes no obligation and does not intend to update these forward-looking statements.