BSQUARE Extends MMC/SD/SDIO Functionality in Windows Mobile 5.0; Next Generation of SDIO Now! V2.x System Software Features Faster Data Transfer, MMCV4 Card Support, Higher Density Cards, and SD Password Protection.

LAS VEGAS -- BSQUARE (Nasdaq:BSQR), a leading provider of smart device solutions, today announced a new product roadmap for SDIO Now! Version 2.x (V2.x) system software technology. The announcement coincides with the introduction of Microsoft Windows Mobile 5.0, which includes code licensed and adapted from the 2.0 version of SDIO Now! software. SDIO Now! V2.x software offers enhanced functionality and high performance for MMC/SD/SDIO Cards necessary to support new applications and services emerging in the market.

Mobile and embedded devices run increasingly sophisticated applications, requiring fast data transfer from I/O peripheral and memory cards. SDIO Now! V2.x delivers speedy performance today with Fast Path technology, which decreases latency and boosts system throughput by up to 200 percent. Demand for higher density memory cards is addressed with support for 2GB MMC/SD cards and 4GB SD cards. Another feature supported by SDIO Now! V2.x is SD Password protection which allows consumers to protect their personal information and content on SD cards.

The roadmap from BSQUARE also includes new features supporting MMCV4 cards in 4 Bit mode which deliver up to 300 percent higher performance than 1-bit mode. As host controllers become available for MMCV4 - 8 Bit, BSQUARE will introduce support for 8-Bit mode. These new features of personal data security, utilization of high density cards with faster access speed and better performance are solid enhancements to the widely adopted SDIO Now! System Software Stack.

"We defined SDIO Now! V2.x roadmap and features based on consumer trends and direct customer feedback. These features provide significant advantages necessary for customers to stay competitive in the market," said Pawan Gupta, Vice President of Products, for BSQUARE. "The announced roadmap lets current and prospective licensees see the future of SDIO Now! so they can make the right product design decisions today."

"Developers can utilize BSQUARE's performance and features in SDIO Now! to help them extend the functionality in Windows Mobile and Windows CE," said Chris Hill, group product manager for the Mobile and Embedded Devices Division at Microsoft Corp. "BSQUARE's offerings complement the increased platform flexibility in Windows Mobile 5.0."

SDIO Now! Product Roadmap

--V2.0

--Available today

--Soft Block

--Fast Path

--V2.1

--Available June 2005

--MMCv4 - 4 bit

--SD Password Protection

--V2.2

--Available August 2005

--MMCv4 - 8 bit

--Dual SDIO

--V2.3

--Available Q4 2005 - Q1 2006

--4 GB SD Card

About SDIO Now!

BSQUARE designed SDIO Now! to enable manufacturers of Microsoft Windows Mobile and Windows Powered devices to interoperate with chipsets, host controllers, and peripherals that are based on the popular Secure Digital (SD) and Secure Digital Input Output (SDIO) standards. The technology provides companies with a common development platform, eliminating the need for vendors to write individual drivers for each device. With a standard driver architecture and APIs, vendors can feel confident that their products will be compatible with various devices regardless of the choice of SD host controller or platform architecture.

About BSQUARE

BSQUARE is a leader with a proven track record in consulting, engineering, licensing, and training for the smart device market. Since 1994, BSQUARE has provided device makers with solutions for designing, developing, and testing innovative products quickly and cost effectively. As one of Microsoft's largest value-added partners worldwide, BSQUARE has unparalleled expertise in Windows Embedded and Windows Mobile software. Current BSQUARE customers include AMD, Casio, Motorola, NEC, Samsung, Sharp, and Texas Instruments.

BSQUARE is a registered trademark of BSQUARE Corporation. Other product or service names mentioned herein are the trademarks of their respective owners.

This release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements relating to our projected financial results and proprietary products strategy. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. Our forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict and could cause actual results to differ materially from those projected. Factors that could affect our actual results include a decline in the market for our products, technology licenses and services; a decline in the market for Windows-based or other smart devices or the failure of this market to develop as anticipated; adverse changes in macro-economic conditions; our ability to successfully implement, execute and make adjustments in our business strategy, business model or product offerings to meet the needs of our current, new and potential customers; risks associated with the effects of our restructurings; our ability to successfully support our operations; 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, 2004 in the section entitled "Business--Factors That Could 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. We undertake 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.