Compaq Unveils First Home Networked Broadband Internet PCs; New Presario Desktops Make Shared, High-Speed Internet Access and Digitally Networked Home a Reality.

HOUSTON--(BUSINESS WIRE)--Jan. 5, 1999--On the heels of bringing consumers the first broadband-ready Internet PCs, Compaq Computer Corporation (NYSE:CPQ) today launched a new line of value-packed Presario Internet PCs which includes desktop models that enable consumers, for the first time, to digitally network their homes using existing phonelines. Compaq also announced new portable PCs, including the first ultra-thin and light DVD notebook with a unique detachable wedge. (For complete details, please see today's press release, "Compaq Delivers Unrivaled Value and Latest Technologies with New Line of Home Internet PCs.")

Compaq's new breakthrough home networking solution allows several family members to simultaneously enjoy the Internet without "waiting in line," print to a shared printer while talking on the telephone, or engage in multiplayer, head-to-head gaming. When Compaq's 1.5 Mb Max Digital modem(1) is installed, consumers can access the Internet at ultra-fast DSL connections, up to 25 times faster than current 56K modems. This combination of high-speed broadband Internet access and home networking creates a new, enriched computing environment that will greatly enhance the entire family's computing experience. To make home networking even more attractive, later this month, Compaq will offer a complete "Networked Home in a Box" bundle for as low as $2,478(2), through its "Built for You" configure-to-order retail program and other direct programs.

Building on the success of the popular Presario line, Compaq also announced today several new desktop and portable models that offer outstanding value at compelling price points. For example, the new Presario 1255 Internet notebook with a 333 MHz processor, is priced under $1,500, and the new Presario 2286 desktop PC is priced at $699. Compaq also announced the availability of several new desktop PCs with the latest technologies through its "Built for You" retail and direct programs.

"Today marks a significant step for Compaq in delivering our vision of the digitally networked home," said Rod Schrock, Senior Vice President and Group General Manager, Consumer Products Group, Compaq Computer Corporation. "Only Compaq offers the winning combination of standards-based home networking and, through our 'Triple Play' program, high-speed Internet access. The Internet computing experience we offer consumers is unrivaled in the industry."

If You Can Plug in Your Phone, You Can Network Your Home

Compaq's home phoneline networking solution is based on the industry standard set by the Home Phoneline Networking Alliance (HomePNA). Home phoneline networking uses existing in-home phone wiring to connect computers and operates concurrently with any normal telephone service, including high-speed DSL Internet connections, that might be using those same wires.

"Simple and affordable home networking is a key area in which Compaq will continue to set the pace for home computing innovation," said Mike Rubin, Director and General Manager, Presario Desktop Division, Compaq Computer Corporation. "Compaq is absolutely committed to delivering the ultimate Internet computing experience in the home. Our new standards-based home networking solution is a true breakthrough in ease of setup and use, making Internet sharing simple and affordable for all consumers."

"Compaq is taking a leadership role in providing home networking solutions for consumers," said Craig Mundie, Senior Vice President for Microsoft Consumer Strategy. "Microsoft and Compaq share a common vision for connecting PCs, services, and intelligent appliances together within the home using open standard technologies, and will continue working together towards achieving that vision."

Delivering on its ease-of-use promise, Compaq is including a Home Network Setup Wizard with its home networking solution. The Wizard automates the process of adding any Windows(R) 95 or Windows(R) 98 PC to a home network; a user only has to type in a name for the computer and select "Typical" installation.

Compaq is also including WinGate Home 3.0 Internet Sharing Software from Deerfield.com. WinGate allows up to three PCs in the home to share a single Internet connection and is compatible with all types of Internet access (analog, cable, DSL and satellite). WinGate also records the sites visited and the files downloaded by PCs on the home network, providing an enhanced level of parental control over Internet use.

"The ability for consumers to 'network' their home has always been considered the next frontier in consumer technology," said John Dunkle of Workgroup Strategic Services, a New Hampshire-based industry analyst firm. "However, before that could have occurred, some real barriers had to be eliminated, such as wiring the home itself and delivering devices that are both affordable and useable. With Compaq's solution, for the first time, customers can enjoy true network functionality with their existing phone wires at an affordable price."

New Presario Internet PCs Feature Home Networking at an

Incredible Value

The new Presario 5670, the latest addition to the award winning, high-performance 5600 series of Internet PCs, sets a new standard for home connectivity. Priced at $2,299, it comes with a home phoneline network adapter, a 1.5 Mb Max Digital Modem, which allows users to surf the Web while making or receiving phone calls, a cable/ADSL modem-ready(3) 10 Mbps Ethernet port, the Digital Creativity Imaging Center(4) with advanced digital editing software, an IEEE-1394 port, four USB ports, and a powerful Intel(R) Pentium(R) II 450 MHz processor.

Starting at just $1,419 (price includes V720 17-inch monitor with 15.9-inch VIA), thelarly configured systems from Dell(5) yet offer priced from $899, welcomes three models into the family -- the Presario 5204, 5220 and 5240. This series comrs.

Company Background

Founded ivelops and markets hardware, software, solutionsproducts and consumer PCs. The company is an ineting partners. Customer support and information about Compaq and its products are available at http://www.compaq.com.

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(1)  G.Lite/56K V.90 updates may be downloaded from the Compaq Web
     site when available. The G.Lite/56K V.90 protocol is designed to
     allow faster downloads from the G.Lite/56K V.90 compliant digital
     sources. Availability of G.Lite/56K V.90 services will vary by
     region and Internet Services Provider (ISP), and may differ from
     V.90 ISP services. Maximum achievable download transmission rates
     with G.Lite/56K V.90 are currently unknown and may not reach 1.5
     Mb, and will vary with line conditions and distance. Simultaneous
     use of a single phoneline for access and regular voice/fax usage
     may require a line splitter or filter under certain conditions.
     Installation of a line splitter is available at an additional
     cost and must be performed by a local telephone company.

(2)  All prices shown herein are estimated U.S. prices. Retail prices
     will vary.

(3)  Cable and ADSL modem service availability and offering vary by
     cable and ADSL provider.

(4)  Works with most third-party devices.

(5)  Comparisons based on following configuration/prices: All systems
     include 350 MHz processor, 128 MB RAM, 17-inch monitor, 56K
     modem, and an approximate 13 GB hard drive. However, the Presario
     5600i for $1609, also includes a home networking card, Ethernet
     port, and IEEE 1394 port, which are not included on the Dell
     Dimension V for $1637. Compaq Presario 5600i also includes a DFP
     port.

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