Compaq Invigorates Value of Armada Brand with New Leasing Program, Aggressive Price Reductions.

HOUSTON--(BUSINESS WIRE)--Oct. 14, 1997--In a move aimed at giving customers maximum price/performance value in notebook computing during the popular end-of-year buying season, Compaq Computer Corporation (NYSE:CPQ) today announced a new Armada 1500 notebook leasing program through Compaq's reseller channel, as well as sweeping U.S. price reductions throughout the Armada notebook computer line.

The Armada 1500 Leasing Program - the first promotional program through Compaq Capital Corporation - is targeted at small- and medium-sized businesses wanting to obtain a Compaq notebook with the flexibility and affordability found through leasing. This leasing promotion is designed to offer the utmost in simplicity, speed and value in obtaining a notebook computer. For those computer users who need an easy-to-use notebook PC, Compaq now offers the Armada 1500 - with an industry-leading all-in-one design - at a very affordable monthly leased price.

In addition, Compaq reduced the prices of nearly every Compaq Armada notebook computer to offer the best mobile computing values available today.

"From the affordable Armada 1500 line of portables offering both power and simplicity, to the Armada 7000 family for users demanding outstanding performance and desktop expansion, Compaq provides a portable solution for virtually every type of customer," said Jim Schraith, Vice President, Compaq North America. "With the announcement of this new leasing program and these extremely aggressive price cuts, there's never been a better time or an easier way to acquire a Compaq Armada notebook."

The Armada 1500 Leasing Program

Starting October 20, Compaq will begin offering a new Armada 1500 leasing option through Compaq Capital Corporation, the company's leasing arm. Compaq launched Compaq Capital earlier this year to provide customers with a single financing source for all their information technology needs during the ownership cycle. From product acquisition to asset management, technology updating and disposal assistance, Compaq Capital helps customers lower the cost of technology ownership. The current Armada 1500 Leasing Program includes all models of the Armada 1500, with prices starting at $70 per month for the Armada 1530DM(a).

"Leasing has become the preferred method of acquisition for corporate notebook users because it provides companies and users with the ability to manage the technology life cycle of their equipment," said Irv Rothman, President of Compaq Capital Corporation. "Most businesses like the flexibility to upgrade or change their notebook units to suit their individual needs, rather than having to commit to a certain model they may outgrow over time."

Leasing presents a number of benefits over a typical purchase:

--Customers profit from the use of computer equipment while avoiding the risks of technology obsolescence. Customers can upgrade or add-on to their PCs as their equipment needs change.

--No down payment is needed. Cash and lines of credit are freed for other more profitable uses. Fixed monthly payments make it easier to forecast expenses.

--Customers can get more with a lease. Monthly lease payments are typically lower than purchase installments, even when you include more features in a system.

--Generally, customers can write off monthly lease payments as tax deductible.

--With a lease, customers can finance all of their technology acquisition costs including software, training, installation and other soft costs. Everything can be bundled into one single affordable monthly payment.

At the end of the lease, customers can return the equipment to Compaq Capital with no further obligation, renew or extend the lease for a fixed period of time at a specific rate, or purchase the equipment at fair market value.

Leasing also represents an ideal opportunity for Compaq resellers. Resellers are immediately reimbursed by Compaq for lease acquisitions, and are able to reduce administrative paperwork by leaving the task to Compaq. Leasing also gives resellers the opportunity to increase their margins by selling more products, and by providing "bundled" solutions with additional software, accessories and services.

Customers who lease an Armada 1500 model by December 31, 1997 can take advantage of the following aggressive leasing rates(b):

Model           36 Month Lease          24 Month Lease

Armada 1530     $70 per month           $96 per month
Armada 1540     $78 per month           $110 per month
Armada 1550     $79 per month           $117 per month
Armada 1580     $89 per month           $129 per month
Armada 1590     $99 per month           $139 per month

"When a business customer needs the latest and greatest technology, without the long-term commitment of a typical purchase, leasing is a perfect alternative," said Adam Shaffer, Senior Vice President of Merchandising, MicroWarehouse, Inc. "Customers can take advantage of high quality products, great prices, easy terms, and frequent upgrades with the Compaq Armada 1500 promotion. And the best part about accessing Compaq's leasing program from a reseller like MicroWarehouse is that we have excellent availability and an easy-to-use process for helping customers select and lease their Armada 1500 notebook - just pick up the phone and call us."

The fully integrated Armada 1500 provides all the features a user may need in one easy-to-carry unit, including CD-ROM, floppy and hard drives and an internal AC adapter. The Armada 1500 family includes a choice of Pentium processors up to the 166-MHz Pentium processor with MMX(TM) technology. Models include hard drives of up to 2.1GB in capacity; 16MB of EDO RAM standard (plus a free 16MB module on the Armada 1530, 1550 and 1580); an integrated CD-ROM and 33.6Kbps Data/Fax modem; as well as an integrated AC adapter. Weight varies by model, ranging up to 7.5 pounds.

Customers can obtain more information about these programs by checking the Compaq website on Monday, October 20 at http://www.compaq.com

Price Reductions

Compaq reduced U.S. prices across the entire Armada portable family by as much as 24 percent, while extending a number of promotional activities to add even more value to the Compaq portables line-up. Prices(c) and promotions(d) are as follows:

Model                 Old Price    New Price      Percent Reduction

Armada 1530DMT(1)      $2,499       $1,999           20%
Armada 1540DMT         $2,799       $2,299           18%
Armada 1550DMT(1)      $2,999       $2,499           17%
Armada 1580DMT(1)      $3,499       $2,799           20%
Armada 1590DMT         $3,699       $3,299           11%

(1) Free 16MB upgrade through November 30, 1997.

Armada 4131T(2)        $2,499       $1,999           20%
Armada 4150(2)         $2,499       $2,199           12%

(2) 50 percent price reduction on 20X Mobile CD Unit on units
purchased through December 31, 1997.

Armada 7330T           $3,799       $3,299           13%
Armada 7350MT          $4,499       $3,799           16%
Armada 7710DMT(3)      $3,699       $2,799           24%

(3) Free 8X CD-ROM on units purchased through October 31, 1997.

The Armada 1500

Designed for notebook computer users who want both great value and ease-of-use in a Pentium-based notebook PC, the Armada 1500 family provides an ideal solution. These notebook models integrate numerous features into one simple design, with simultaneous access to large hard drives, a diskette drive, an integrated CD-ROM drive, AC adapter and 33.6 Kbps modem.

The Armada 4100

The Armada 4100 was created for portable users whose needs change on a daily basis. This notebook line easily converts from a 5.2-pound slimline configuration to a robust full multimedia configuration. Features include Pentium processors up to the 166MHz Pentium(R) processor with MMX(TM) technology; 12.1-inch CSTN or CTFT SVGA displays; 16MB RAM, expandable to 80MB; and up to 2GB hard drives. Through December 31, 1997, customers can purchase an optional Mobile CD Unit at a 50 percent price reduction(e).

The Armada 7000 Series of Notebooks

The Armada 7000 series of notebook PCs includes the Armada 7300 and 7700, showcasing an industry-leading combination of performance, desktop functionality and unique expansion options designed to meet the needs of mobile users both in and out of the office. Customers may select from either the highly expandable and towerable ArmadaStation Expansion Base or the MiniStation E Convenient Base options to give their notebook full desktop functionality.

The Armada 7300 family is the perfect blend of mobility and performance in a small package at just six pounds, while the Armada 7700 family is the highest performance notebook from Compaq - both offering the convenience of a portable PC with desktop-equivalent functionality and performance. The Armada 7700 series products even come equipped with an internal AC adapter to make packing for trips less cumbersome.

The Armada 7000 series of products come standard with high performance graphics, PremierSound stereo display-mounted speakers, hardware wavetable support and CardBus slots with zoom video interface capabilities. Most models also include a 33.6Kbps internal telephony modem - the fastest internal modem available in the industry today - which is upgradeable to the K56 flex protocol in the future(f).

The Armada 7000 series also comes with a full-size keyboard and an EasyPoint III pointing stick, enhancing its ease-of-use, plus fast IrDA support. And in a continuing effort to provide products that reduce the total cost of ownership, the Armada 7000 family of notebooks feature Compaq's Intelligent Manageability. Intelligent Manageability simplifies the management of network PCs, making them easier and less expensive to own through such innovative features as asset management, security management and fault management.

Company Background

Compaq Computer Corporation, a Fortune 100 company, is the fifth largest computer company in the world and the largest global supplier of personal computers, delivering useful innovation through products that connect people with people and people with information. The company is an industry leader in environmentally friendly programs and business practices. Compaq is strategically organized to meet the current and future needs of its customers, offering Internet and enterprise computing solutions, networking products, commercial PC products and consumer PCs. As the leader in distributed enterprise solutions, Compaq has shipped over a million servers. In 1996, the company reported worldwide sales of $18.1 billion. 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 can be found at http://www.compaq.com or by calling 1-800-OK-COMPAQ. Product information and reseller locations can be obtained by calling 1-800-345-1518.

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(a) Price refers to a 36 month lease at $70 per month for the Armada 1530DM only.

(b) Financing available through Compaq Capital Corporation to qualified commercial customers. Rates are based on credit rating, terms, and options. Other restrictions may apply.

(c) All prices listed are U.S. selling prices. Reseller prices may vary.

(d) In the U.S., while supplies last, with purchase of qualifying products only.

(e) 50 percent price reduction on 20X Mobile CD Unit on units purchased through December 31, 1997.

(f) Upgrade planned for year-end. The K56flex protocol is designed only to allow faster downloads from K56flex compliant digital sources. Maximum achievable download transmission rates are currently unknown, may not reach 56 Kbps, and will vary depending on line conditions.

Compaq, Registered U.S. Patent and Trademark Office. Product names mentioned herein may be trademarks and/or registered trademarks of their respective companies.

CONTACT: Compaq Computer Corporation

Nora Hahn, 281-514-0484

[e-mail]

or

Miller/Shandwick Technologies

Julie Akstin, 617-351-4149

[e-mail]