BSQUARE Announces Relationship with Major European Partner for New Category of Handheld Device.

Business Editors/High-Tech Writers

CeBIT 2003

HANOVER, Germany--(BUSINESS WIRE)--March 10, 2003

BSQUARE Teams with Hoeft & Wessel Skeye Webpanel AG to offer New

Wireless Capabilities to Enterprise and Vertical Market Customers

BSQUARE Corporation (Nasdaq:BSQR), a leading provider of software and technology powering smart devices, today announced a new OEM business relationship with Hoeft & Wessel Skeye Webpanel AG, makers of the world's smartest Windows CE-based tablet.

Hoeft & Wessel has entered into a Letter of Intent to make an initial purchase of 5,000 wireless devices based on BSQUARE's Power Handheld reference design, subject to certain conditions, including the positive conclusion of a market evaluation. Hoeft & Wessel intends to offer the devices to their customers throughout Europe under the brand name skeye.mobile.

The new skeye.mobile devices are to be targeted at vertical market customers, predominantly in the areas of retail sales and transportation dispatching, as well as enterprise users. The handhelds would complement Hoeft & Wessel's existing skeye.pad tablet product line by targeting mobile professionals who seek an unrivaled wireless data experience in a smaller form factor device. It would be the first mobile device to feature a VGA display that presents web pages like a laptop, a retractable QWERTY thumb-type keyboard, GSM cell phone, and built-in radio technology to access high-speed, always-on GPRS wireless data networks -- all in a very small handheld form factor.

"BSQUARE's turnkey handheld device design allows us to offer our customers two different tiers of wireless data products to meet their specific requirements," said Peter Claussen, Executive Chairman, Hoeft & Wessel Skeye Webpanel AG. "Since skeye.pad and skeye.mobileboth use the Windows CE operating system, it will be easy for our customers to develop mobile application software that runs on either device without significant modification."

"A strong focus on serving vertical markets like retail, as well as enterprise customers, makes Hoeft & Wessel an ideal OEM partner for BSQUARE," said Bill Baxter, President & CEO, BSQUARE Corp. "Business professionals in Europe already lead the rest of the world in using next-generation mobile applications and wireless data networks to increase their productivity. Now the skeye.mobile handheld gives them a smaller, higher performance device for accessing those applications."

"BSQUARE's Power Handheld is a great tool with very unique features for the enterprise," said Tony Sica, Vice President Intel Wireless Communication and Computing Group. "To this point, it has been very difficult for OEMs and carriers to capitalize on the ever-increasing voice and data opportunities found in corporations of all sizes. Powerful clients like BSQUARE's that run Intel(R) XScaleTM technology based processors provide a very compelling way for wireless carriers to turn data into dollars and enable OEMs to get into the wireless IT game in significant ways."

BSQUARE Power Handheld Reference Design

The BSQUARE (R) Power Handheld device design is a turnkey wireless device solution that incorporates the latest Intel XScale and Microsoft Windows CE .NET technologies. The device design also includes a comprehensive suite of productivity software applications and an integrated operating system software framework that emphasizes messaging such as email, SMS, IM and voice and supports the delivery of wireless data services. This allows enterprises to immediately extend their custom productivity applications to a wireless device without having to revise them to fit a small screen.

About Hoeft & Wessel Skeye Webpanel AG

Hoeft & Wessel Skeye Webpanel AG has been separated from the Hoeft & Wessel AG into a 100 percent subsidiary by the end of 2000. With the skeye.pad the internet business line invented a completely new form of internet access making Hoeft & Wessel one of the leading companies in the field for mobile communication solutions. The clientele comprises national and international companies from different branches that make use of the customized solutions developed on a project basis. Previously used chiefly in the B2B (business-to-business) sector, Hoeft & Wessel is now also increasingly offering the skeye.pad to private customers via various distribution partners due to the great success of the product. For more information on our company or the possible fields of applications of the skeye.pad please visit www.skeye.com or call [phone].

About BSQUARE

BSQUARE accelerates the development, deployment, and management of next-generation smart devices and applications. For nearly a decade, BSQUARE has provided more than 150 world-class manufacturers, integrators, and service providers with the building blocks necessary to design, develop, and test innovative products quickly and cost effectively. The company's suite of products and services includes Device Development Solutions, Wireless Solutions, and Custom Engineering Services. BSQUARE offers its customers deep expertise in the latest hardware and software, providing critical engineering services that have resulted in the successful launch of hundreds of new products and applications. For more information, visit BSQUARE at www.BSQUARE.com or call 888/820-4500.

BSQUARE is a registered trademark of BSQUARE Corporation. All other product and company names herein may be trademarks of their respective owners.

Any statements, expectations and assumptions contained in this press release that do not describe historical facts, such as statements about the relationship with Hoeft and Wessel, the actual purchase of BSQUARE's Power Handheld reference design, the performance, functionality or use by Hoeft and Wessel of BSQUARE's Power Handheld reference design, and the corresponding results constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect BSQUARE's actual results to differ materially from current expectations include failure of the parties in entering into a definitive agreement, failure to successfully execute and bring the product to market in a timely fashion, a decline in the market for Windows Embedded smart devices or the failure of such market to develop as anticipated, rapid technological change in smart devices and peripherals, risks associated with the technical complexity associated with integrating software and hardware devices, risks associated with international business delays, competition and intellectual property risks. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in BSQUARE's Annual Report on Form 10-K for the year ended December 31, 2001 in the section entitled "Risk Factors" and those discussed in BSQUARE's subsequent Quarterly Reports on Form 10-Q, in the section entitled "Certain Factors That May Affect Future Results." Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. BSQUARE undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.