BSQUARE SDIO Now! Program Accelerates Introduction of SDIO Card GPS Receiver from Matsushita Electric Works.

Business Editors/High-Tech Writers

BELLEVUE, Wash.--(BUSINESS WIRE)--May 20, 2003

Faster Development of Platform-Independent Peripheral Device 

Driver was Key for Matsushita Electric Works 

BSQUARE (Nasdaq:BSQR), a leading provider of software and technology powering smart devices, today announced that Matsushita Electric Works, Ltd. (MEW) is one of the newest companies to join the SDIO Now! membership program.

Using SDIO Now! software tools and related technology to speed the device development process, MEW will release a new SDIO Card Global Positioning System (GPS) Receiver for Microsoft(R) Pocket PC handhelds.

BSQUARE's SDIO Now! program helps manufacturers of chipsets, portable devices, card host controllers, and peripherals support the popular SD and SDIO standards on Microsoft Pocket PC, Smartphone, Windows(R) CE, and Windows CE .NET devices. Through the SDIO Now! program, MEW gained access to BSQUARE's SD Peripheral Device Driver Development Kit (DDK). The DDK helped MEW develop device drivers on standard development/debug platforms.

"We decided to join the SDIO Now! program to speed the device driver development and to leverage market-proven SD/SDIO solutions," said Takahide Noguchi, Manager of Matsushita Electric Works. "SDIO Now! gave us a common development platform that eliminated the need to write individual drivers for each handheld platform."

"No company needs to waste their resources and valuable time developing a complete SD/SDIO Card architecture when they can become a member of SDIO Now! and utilize our industry-leading technology," said Bill Baxter, CEO of BSQUARE. "Peripheral products like the new SDIO Card GPS receiver from Matsushita Electric Works should bring valuable functionality to Pocket PC handhelds, helping expand the overall size of the market for smart devices."

About BSQUARE Corporation

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.

About Matsushita Electric Works

Matsushita Electric Works, Ltd. (Kadoma-shi, Osaka, President: Kazushige Nishida) is comprised of five divisions operating in the domains of electrical construction materials, home appliances, building products, electronic and plastic materials and automation controls. In each of these areas, MEW conducts research and development, manufacturing, sales, product design and installation, and servicing. MEW entered the GPS market in 1990, manufacturing and marketing GPS antennas. In 2000 MEW expanded its investment in the GPS market with the development and introduction of several high sensitivity GPS products. MEW markets its GPS products globally through the company's worldwide sales channels.

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 performance, functionality or use of BSQUARE products, solutions and programs, 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 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 and the resulting obsolescence that may occur due to subsequent Microsoft Windows Embedded product releases, risks associated with the technical complexity associated with integrating software and hardware devices and peripherals, 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, 2002 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.