Press Release:

HP Delivers with Pixology and ePOINT Breakthrough Digital Photofinishing Solution for Retail Market

Companies Offer Technology Demonstration of Interactive Photo Terminal at Photokina 2002

HP (NYSE:HPQ) today announced plans to pursue with Pixology Ltd. and ePOINT Ltd. an end-to-end digital photofinishing solution -- from order placement to fulfillment -- for the retail market. The new solution will make it quick and easy for consumers to place orders for prints and other photo products from the images captured with their digital and traditional cameras.

Together, the three companies will demonstrate the technology of an interactive photo terminal in HP's booth at Photokina 2002 (Stand A2 in Hall 8) Sept. 25-30. This new photo experience is one of several demonstrations that HP will offer at the show, illustrating the new opportunities that exist for both consumers and retailers using HP's digital imaging solutions.

"HP is now able to realize its vision of a customizable digital photofinishing solution for retail that delivers a superior consumer imaging experience," said Gary Cutler, vice president, HP Digital Imaging Organization. "Together with Pixology and ePOINT, HP is able to offer consumers an easy way to print their digital photos at retail and at the same time offer retailers a complete, end-to-end photofinishing solution."

The solution is built on HP's digital imaging architecture, including ePOINT's interactive hardware platform and Pixology's digital photography platform. HP has combined the strengths of these companies to create a complete solution that will enable consumers to easily place orders via their home PCs or new in-store terminals.

Once placed, digital orders will be routed via Pixology's software to a Phogenix DFX digital photofinishing system, which leverages HP's inkjet printing technology and imaging expertise. Customized photo packages, as well as photo CDs that use HP Memories Disc Creator software for picture viewing on a PC or DVD player, will then be created based upon the order. In addition to retail-branded CDs, HP will enable retailers to brand photo-sharing Web sites for their customers to post, store and share photos.

"The industry recognizes that a simple, in-store solution for collecting, printing and delivering photos is necessary in order to drive digital photography to the mass market," said Yuval Yashiv, chief executive, Pixology Ltd. "With this announcement, HP will become the first industry player to deliver a totally integrated system that provides consumers with an easy-to-use interactive photo terminal for obtaining prints. We are delighted that Pixology has been selected to be involved in such a strategic project."

"ePOINT is proud to have been chosen as a key contributor to HP's new retail photofinishing solution," said Gordon Venters, chief executive officer, ePOINT Ltd. "We are confident that HP is uniquely positioned to deliver an integrated photofinishing solution that has tremendous growth potential in the digital imaging market."

The pilot program for the HP solution is expected to begin in fall 2002.

About Pixology Ltd

Pixology is a software company focused exclusively on the digital photographic market.

It is backed by two leading European venture capital firms -- 3i, Europe's largest venture capital company, and Young Associates, a specialist early stage technology VC. Lord Young, former executive chairman of Cable & Wireless, chairs the company.

Dedicated to digital imaging since 1994, the company provides end-to-end software solutions that enable consumers to easily print, manage and share their digital pictures. Its digital imaging infrastructure and internet printing solutions are used today by several leading global photo brands and some of the best-known retail, ISP and media brands in Europe. In addition, Pixology licenses its software to multiple software and hardware vendors.

Pixology has been entrusted by blue-chip brand names including BT, Dixons Kodak, Konica, Jessops, Microsoft and ntl which all use the company's technology.

The company is a participating member of the International Imaging Industry Association (I3A) -- the largest imaging industry group in the world -- whose influential members include Eastman Kodak, Fuji Photo, HP, Agfa and Canon. Pixology sits alongside these companies on I3A's CPXe networking standards committee.

For more information on Pixology please visit

About ePOINT

Founded in 1991, ePOINT specializes in design of interactive technology for e-business applications in the retail, finance and leisure markets. From its headquarters in Alloa, Scotland, ePOINT has developed a range of touch-interactive terminals designed to open up new retail sales channels, significantly increase revenues and offer greater choice for customers. These systems enable retailers to provide a channel for their customers to access a wide choice of online products and services at lower cost than through conventional store inventory. ePOINT's innovative product line includes a range of high-performance consumer terminals that link digital camera users to retail photo-finishing services, making it easier than ever to get quality prints from digital images. Further information about ePOINT and its products is available at

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. More information about HP is available at

This news release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never 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. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including any projections of earnings, revenues, or other financial items; any statements of the plans, strategies, and objectives of management for future operations; any statements concerning proposed new products, services, or developments; any statements regarding future economic conditions or performance; statements of belief and any statement of assumptions underlying any of the foregoing. The risks, uncertainties and assumptions referred to above include employee management issues; the timely development, production and acceptance of products and services and their feature sets; the challenge of managing asset levels, including inventory; the flow of products into third-party distribution channels; the difficulty of keeping expense growth at modest levels while increasing revenues; 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, 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. HP assumes no obligation and does not intend to update these forward-looking statements.

About HP

HP Inc. creates technology that makes life better for everyone, everywhere. Through our portfolio of printers, PCs, mobile devices, solutions, and services, we engineer experiences that amaze. More information about HP Inc. is available at