Agere Systems Awards HP Nationwide Service and Support Contract.

Business Editors

PALO ALTO, Calif. and ALLENTOWN, Pa.--(BUSINESS WIRE)--July 31, 2002

HP (NYSE:HPQ) today announced that it is delivering nationwide service and support to Agere Systems (NYSE:AGR.A, AGR.B), a global communications component vendor. As part of a three-year managed services contract, HP is implementing a cost-effective services plan to manage Agere's data centers and improve its operational efficiencies.

"With HP as Agere's enterprise partner, we will better realize measurable value from our technology investments," said Ron Roberts, chief information officer, Agere Systems. "Knowing that our central server and data center infrastructure is managed and supported by HP enables us to concentrate on our core business processes and our customers, confident that the service and support we need will be there."

"This contract demonstrates HP's ability to deliver superior customer value through its expanded breadth of services," said Ann Livermore, executive vice president, HP Services. "We're helping Agere achieve greater flexibility and lower risk while controlling its costs for procuring, supporting and managing its IT infrastructure."

HP was awarded this new contract following an extensive request for proposal process that included competitive bids from several other major IT service providers, including the incumbent provider.

"HP demonstrated its flexibility to scale its services offering as needed to accommodate the rapidly evolving requirements of our operations while maintaining the highest quality of support," said Dan Jamison, senior IT procurement specialist, Agere Systems.

Beyond the scope of this new services contract, Agere Systems has deployed HP's UNIX(R) servers and industry-standard HP ProLiant servers, as well as HP desktop PCs and notebooks throughout its IT infrastructure.

About Agere Systems

Agere Systems is the world leader in communications components. The company delivers integrated circuits, optical components and subsystems that access, move and store network information. Agere's integrated solutions form the building blocks for advanced wired, wireless and optical communications networks. The company is a leader in providing integrated Wi-Fi solutions for PC manufacturers, as well as in storage solutions with its read-channel chips, preamplifiers and system-on-a-chip solutions. More information about Agere Systems is available from its Web site at http://www.agere.com.

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 combined revenue on a pro forma basis with the Compaq transaction 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.

UNIX is a registered trademark of the Open Group.

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 annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001, HP's quarterly report on Form 10-Q for the quarter ended January 31, 2002 (as filed with the SEC on March 12, 2002) and subsequently filed reports. HP assumes no obligation and does not intend to update these forward-looking statements.