Compaq Introduces New Feature-Rich, Value-Packed Home PCs at Prices Substantially Lower Than Dell and Gateway.

HOUSTON--(BUSINESS WIRE)--Sept. 22, 1998--

Presario Line for Holiday Season Offers Quick Internet

Access and Rich Multimedia at Prices Up to 24 Percent Lower

than Dell; Up to 14 Percent Lower Than Gateway(1)

Committed to offering consumers the most enriching Internet computing experience at the best value, Compaq Computer Corporation (NYSE:CPQ) today announced the worldwide availability of its most advanced and competitively-priced line of Presario Internet PCs.

Building on the award-winning Presario line, the new models include the fastest processors, state-of-the-art digital technologies, easy Internet access, and rich visual and sound qualities. The new PCs are priced up to 24 percent lower than Dell and up to 14 percent lower than Gateway for similarly configured products with less robust features(1).

"Compaq is passionate about offering consumers the best computing and Internet experience possible, at the best value," said Rod Schrock, Senior Vice President and Group General Manager, Consumer Products Group, Compaq Computer Corporation. "Not only do our new Presario PCs offer more features and capabilities than competitive products, but they are substantially less expensive. With today's announcement, we continue to lead the industry with the highest quality, most innovative and best priced products available."

New Models Feature Latest Technologies, Enhanced Connectivity,

Great Value

Today Compaq introduced two additions to its Presario 5100 Series of minitower PCs -- the Presario 5150 and 5170. The new Internet PCs feature next-generation technologies, such as the industry-standard Digital Flat Panel Port, for connection to digital flat panel monitors; an integrated 56K ITU V.90 modem(2), and a cable modem ready(3) 10 Mbps Ethernet Port, for the fastest available Internet access and ADSL high-bandwidth access support. The 10 Mbps Ethernet Port will also support home networking, enabling consumers to share Internet access, as well as files and printers.

Along with these features, the new Presario 5150 and Presario 5170 also include Compaq's unique Easy Access Internet Keyboard for one-touch access to the Internet, e-mail, a search engine and secure online shopping and Compaq's Creativity Action Center(4), for easy connection to game and USB peripherals. Designed to give consumers an incredible multimedia experience, both Presario models include 128 MB 100 MHz SyncDRAM, upgradeable to 348 MB; 512KB L2 pipeline burst cache; and 2X AGP (with 4 MB 100MHz SyncGraphics video memory) 3-D graphics, powered by the ATI RageLT Pro graphics controller.

The Presario 5150, with a 350 MHz AMD K6-2(R) processor with 3DNow! Technology and an 8GB(5) hard drive is priced at $1,199(6) (after rebate(7)). This is 24 percent less than the closest Dell Dimension V and seven percent less than the closest Gateway G6-333C, which both have a slower clock speed (Intel(R) Celeron(R) 333 MHz) processor and a smaller (6.4GB) hard drive(8).

The Presario 5170, with an Intel(R) Pentium(R) II processor -- 350 MHz, an Iomega(R) ZIP BUILT-IN(TM) drive for storing large Internet and multimedia files, and a 10GB hard drive, is priced at $1,499 (after rebate), which is 22 percent less than a comparable Dell Dimension V and 14 percent less than a comparable Gateway G6-350(9).

For consumers with on-the-go lifestyles who want an exceptional multimedia and Internet experience, Compaq has redesigned the Presario 1200 Series of consumer notebooks with optimized audio, video and graphics, and a one-touch Internet button. Three new all-in-one models -- the 1235, 1240, and 1250 -- combine JBL Pro Audio speakers, Aureal A3D(TM) Interactive 360 degree Positional Sound and high-performance 128-bit 3D Accelerated Graphics to provide users with a realistic "as if you were there" audio and visual experience during gaming or Web surfing.

The Presario 1235 Series features a 266 MHz AMD K6(R) MMX(TM) Enhanced processor, 32MB of memory, a 4.0GB hard drive, and is priced at $1,699 (after rebate). The Presario 1240 comes with an Intel(R) Pentium(R) processor with MMX(TM) technology -- 266 MHz, 64MB of memory, a 4.0GB hard drive, and is priced at $1,999 (after rebate). The Presario 1250 includes a 300 MHz AMD K6(R) MMX(TM) Enhanced processor, 64 MB of memory, a 6.4GB hard drive, and is priced at $2,399 (after rebate). All three models come standard with a 24X Max(10) CD-ROM drive and SyncDRAM memory upgradeable to 96 MB.

Today's announcement follows on the heels of the recently introduced Presario 5660, the ultimate Internet PC for the digital future and the latest addition to the award-winning Presario 5600 performance minitower series, and the Presario 1810 notebook, the first high-performance all-in-one consumer notebook with DVD-ROM to be sold through U.S. retail channels.

Compaq Delivers a Superior Internet Experience

With fast 56K ITU V.90 modems(2) standard across all products, cable-modem ready(3) 10 Mbps Ethernet ports on select models and innovative features such as Compaq's Easy Access Internet Keyboard, Compaq offers consumers a fast and enjoyable Internet experience. Compaq also continues to make surfing the Internet as attractive and as easy as possible with its $100 rebate offer. Now, with the purchase of a new Presario desktop or notebook, customers can receive a $100 mail-in rebate simply by signing up for a 50-hour free trial of Compaq's Easy Internet Access Service, powered by GTE(7).

To provide customers with choices in going online, a Compaq/America Online (AOL) co-branded Internet service is also available. Customers who designate this selection as their Internet service provider are also offered a 50-hour free trial(11). AOL will be included as an icon on Presario PCs and through Compaq's Easy Access Internet Keyboard.

In addition to selecting more than 20 leading brand-name Internet companies as partners for its Easy Access Internet Keyboard, Compaq also delivers its fast and powerful AltaVista Search Service, the premier resource for locating information on the Internet.

Compaq Built for You -- Custom Ordering for Value, Performance

and Quality

Providing the value and flexibility of buying direct with the convenience of retail store support, Compaq's "Built for You" retail program lets consumers configure and purchase a Presario 5600 Series desktop PC or Presario 1600 or 1800 Series notebook PC with the options that best suit their needs.

With new pricing introduced last month, consumers can configure their own Compaq desktop or notebook PC at base prices ranging from $1,299 to $3,499(6) (after rebate(7), shipping not included). In addition to new competitive prices, there are several new options available for Compaq's desktop PCs such as JBL Pro Premium Powered speakers with sub woofers and Diamond Monster II 3D (3Dfx Voodoo II) with 12MB of memory.

Consumers can also purchase Compaq's new V910 19-inch (18 inches viewable) monitor through the "Built For You" program. This top-of-the-line display -- for PC users who also demand the best performance from their monitor -- features razor-sharp .26 dot pitch resolution, 1600x1200 maximum resolution, 1280x1024 maximum flicker-free resolution, antiglare screen and on-screen display controls. The monitor is priced at $429.

Compaq's Total Home Computing Solution at Value Prices

Compaq continues to provide consumers a total home computing experience at unmatched values with its multimedia monitors and color inkjet printers. For use at home, in the dorm room or in a small office, Compaq color inkjet printers, priced from $129, pack a big punch with their space-saving design, easy setup and pre-packaged creativity software.

Compaq's value-rich multimedia monitors have distinctive styling that feature newly-designed JBL Pro speakers for true-to-life audio and an Integrated Telex(R) microphone for optimum voice quality. Prices range from $179 to $899.

Compaq Extra Mile Service for Total Customer Satisfaction

Compaq is going the distance to care for its customers through its Extra Mile Service program. This comprehensive program offers Extra Mile Maintenance to help keep a customer's Presario in peak operating condition through free automated software updates via the Web. Also standard is Extra Mile Assistance, for quick diagnosis and resolution of problems, and Extra Mile Solutions, giving Presario users the information and tools they need to keep their PC running smoothly.

Company Background

Founded in 1982, Compaq Computer Corporation is a Fortune Global 100 company. Compaq is the second largest computer company in the world and the largest global supplier of personal computers. Compaq develops and markets hardware, software, solutions, and services, including industry-leading enterprise computing solutions, fault-tolerant business-critical solutions, networking and communication products, commercial desktop and portable products and consumer PCs. The company is an industry leader in environmentally friendly programs and business practices.

Compaq products are sold and supported in more than 100 countries through a network of authorized Compaq marketing partners. Customer support and information about Compaq and its products are available at http://www.compaq.com. -0-

Notes:
(1)  Comparisons based on current U.S. prices and configurations
  listed on Dell and Gateway's Web sites on 9/18/98.
(2)  ITU V.90 modems are designed only to allow faster downloads from
  K56flex or V.90 compliant digital sources. Maximum achievable
  download transmission rates are currently unknown, may not reach
  56 Kbps and will vary with conditions.
(3)  Cable modem service availability and offering vary by cable
  provider.
(4)  Works with most third party devices.
(5)  For hard drives, GB = billion bytes.
(6)  All prices shown are estimated U.S. retail prices. Retailer prices
  may vary.
(7)  $100 mail-in rebate offer valid with activation of 50-hour free
  trial of Compaq Easy Internet Access from Compaq Internet Setup.
  The 50 hours must be used within 30 days from initial set-up. A
  valid credit card is required in order to initiate the service
  although no charges will be incurred until the 50-hour trial has
  expired. There is no obligation to continue with the service once
  the 50-hour free trial has expired. If users choose to continue
  with the service after the free trial has expired, a $19.95 per
  month fee will be charged. If you do not have a major credit card
  or GTE does not provide local service to your area, please call
  1-800-322-9435 for rebate options. Rebate offer is valid only in
  the USA, U.S. Territories and U.S. Military Bases and expires
  4/30/99. See rebate included with this product for additional
  terms and considerations.
(8)  Dell Dimension V listed at $1,476 plus $100 for shipping (Celeron
  333 MHz processor, 128MB memory and 6.4GB hard drive). Gateway
  G6-333C listed at $1,194 plus $95 for shipping (Celeron 333 MHz
  processor, 128MB memory and 6.4GB hard drive). Compaq Presario
  5150 (K6-350 MHz processor, 128MB memory and 8GB hard drive)
  estimated retail price at $1,199 after application of $100
  mail-in rebate with free trial of Compaq Easy Internet Access.
(9)  Dell Dimension V listed at $1,818 plus $100 for shipping (Pentium
  II 350 MHz processor, 128MB memory and 10GB hard drive). Gateway
  G6-350 w/HE listed at $1,640 plus $95 for shipping (Pentium II
  350 MHz processor, 128MB memory and 10GB hard drive). Compaq
  Presario 5170 (Pentium II 350 MHz, 128MB memory and 10GB hard
  drive) estimated retail price at $1,499 after application of $100
  mail-in rebate with free trial of Compaq Easy Internet Access.
(10) 24X Max CD-ROM drive data transfer rates may vary from 1500 to
  3600 bps.
(11) Selection of this service does not meet requirements for $100
  mail-in rebate offer.

-0-

Note to Editors: "Interactive 360 degree Positional Sound" should be written with a degree symbol after 360.

Compaq, Registered U.S. Patent and Trademark Office. MMX is a trademark of Intel Corporation. Other product names mentioned herein may be trademarks and/or registered trademarks of their respective companies.