Compaq and Thomson Consumer Electronics Launch PC Theatre Product.

HOUSTON--(BUSINESS WIRE)--April 28, 1997--

New Jointly Branded PC Theatre Provides New

Dimension in Home Entertainment

In a defining moment of convergence between the consumer electronics and PC industries, Compaq Computer Corporation (NYSE:CPQ) and Thomson Consumer Electronics' RCA brand, today launched the new PC Theatre product that is designed to forever change the entertainment and computing experience in the home.

Designed for consumers who are looking for a richer home entertainment experience, the new PC Theatre integrates a 36-inch(1) (diagonal) big screen display from the RCA brand with a powerful Compaq multimedia PC to deliver outstanding entertainment choices for the entire family.

Over the past year, Compaq and Thomson engineering teams overcame several design hurdles to make the PC Theatre the most integrated product in the category. Using PC Theatre, consumers can now seamlessly make the most of broadcast, cable, digital satellite, laser disc or DVD programming and video; play interactive PC games; surf the Internet; and compose and send e-mail -- all from the comfort of their living room couch.

"PC Theatre combines the ultimate in home theatre excitement with the best features in home computing in a single integrated product," said Louis E. Lenzi, Vice President, Multimedia Products & Services for Thomson Consumer Electronics. "We believe PC Theatre will deliver a broader scope of easy to use entertainment and information services for the family."

"PC Theatre represents a milestone in the blending of personal computers and consumer electronic devices," said Laurie Frick, Vice President, Emerging Markets, Compaq Consumer Group. "Both Compaq and Thomson have proved that it's possible to harness the power of each industry to create new and useful forms of entertainment for consumers."

Using the PC Theatre, consumers can view a television program or video and simultaneously search the Internet or an interactive encyclopedia to learn more about the subject they are watching. Likewise, they can play exciting action or "edutainment" games with big-screen realism while keeping an eye on world events through television, the Internet, or e-mail.

The new PC Theatre is priced at $4,999(2) and will be jointly marketed with both the RCA and Compaq brand names on the product. It will be available in mid-May at Circuit City and CompUSA locations in six initial U.S. markets: San Francisco/San Jose, Seattle, Denver, Dallas/Fort Worth, Houston, and Washington D.C. National distribution is planned for the fall.

The Best of Television

Jointly developed by Compaq and Thomson, the PC Theatre includes technologies and features typically associated with advanced, high-end televisions, including:

--Exceptional Picture Quality -- A Thomson-manufactured, 36-inch Digital Precision Pitch picture tube with VGA capability uses non-interlaced (progressive scan) technology to deliver digitally enhanced, lifelike video and precise reproduction of text and graphics, whether it is being used for PC or TV activities.

--Easy Set Up -- PC Theatre comes cable- and DSS-ready through the product's CPU. An interactive set-up guide helps users configure television channels, electronic program guides, auto tuning, PC program launcher and parental controls.

--Ease of Use -- Representing a breakthrough in PC ease of use, customers have easy access to PC Theatre's many television and PC features through an extremely intuitive network of on-screen menu systems and program guides. The on-screen display provides access to the PC Theatre, electronic program guides, television set-up controls, picture quality control, video and CD sources, and all PC entertainment, including the Internet and games.

--Electronic Program Guides -- The RCA/Compaq designed interactive program guide -- based on StarSight Telecast technology -- provides a look at television programming information up to two days in advance at no cost to viewers and allows customers to simply click on a program's title to link directly to the correct channel. Viewers can also link directly to a number of advertiser-supported Internet web sites. Data for this program guide is automatically updated and displayed for 48-hours.

--Home Theatre Connectivity -- PC Theatre connects to virtually any digital satellite system, VCR, DVD player, Laser Disc player, home stereo system, cable television and video camera.

--Universal Remote Control -- A universal remote control puts PC Theatre customers in complete control of both TV and PC functions and is also compatible with most brands of VCR, satellite receiver, cable box, DVD player, laser disc and audio equipment.

--Rich, Stereo Sound -- Two speakers that run vertically down the front of the monitor provide rich, stereo matrix surround sound with user-controllable volume, balance, bass, and treble.

--Other Popular TV Features -- PC Theatre includes other popular television features such as two-tuner picture-in-picture, enabling the viewer to watch two channels at the same time without a second signal source, such as a VCR.

...Combined with the Best of Home Computing

As a full-featured, multimedia PC, the PC Theatre is powered by a 200 MHz Intel Pentium processor with MMX technology and includes 40 MB of EDO RAM, a 3.8 GB hard drive, 16X Max CD-ROM drive and a 33.6 Kbps modem. Other popular PC features include:

--Instant On -- There is no need to boot up the PC Theatre. Similar to typical TVs, customers need only press the power button to immediately enjoy using PC Theatre.

--Wireless Keyboard -- An innovative wireless keyboard includes easy-access function keys that operate all of the PC Theatre's capabilities, embedded numeric keypad, integrated trackball, and multiple infrared transmitters so users can sit virtually anywhere in the room (up to 30 feet away) and still interact with the product. The PC Theatre keyboard also features a recessed base so that it can be comfortably placed across one s lap when operating.

--Big Screen Multimedia Monitor -- The PC Theatre's big-screen 36-inch (diagonal) display brings incredible realism and excitement to gaming and other multimedia and video-intensive applications. Dual resolution modes are optimized for PC and TV viewing, and can easily support laser disc, DVD and other advanced video media. Integrated audio speakers deliver rich, powerful sound.

--Phazer Game Pad -- A game-pad that easily connects to the PC Theatre's game port features 11 programmable buttons for exciting gaming realism and action.

--Best Internet Experience -- Unlike simple Internet TV devices, the PC Theatre displays Internet text and graphics with incredible crispness. In addition, PC Theatre supports Java and other downloadable emerging Internet software, allowing users to enjoy sound and motion-oriented Web pages.

--Free e-mail -- PC Theatre comes bundled with the popular Juno communications software that provides free e-mail.

--Useful Software -- Other pre-bundled software includes more than 15 reference, education, entertainment and communications titles, including the following: Compton's Interactive Encyclopedia 1997 (MPEG); Math Adventure; Indy Car II; You Don't Know Jack; Netscape Navigator; Internet Explorer; Juno and PointCast Network.

Service and Support

PC Theatre is backed by a Compaq one-year U.S. limited warranty(3) on the CPU, an RCA one-year U.S. limited warranty on the 36-inch multimedia display and an RCA two-year U.S. limited warranty on the picture tube. PC Theatre customers who require service and support should call the Compaq Service and Support Phone Center at 1-800-OK-COMPAQ.

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.

Thomson Consumer Electronics Background

Thomson Consumer Electronics, Inc., headquartered in Indianapolis, Ind., is the country's largest manufacturer and marketer of television receivers and related video products under the RCA, ProScan and GE brands. Major products are color TVs, VCRs, camcorders, laserdisc and compact disc players, and the 18-inch Digital Satellite System. Now moving more directly into convergence products, Thomson first previewed a "Genius Theatre" approach to a combination TV/PC product in late 1995.

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

(1) Actual viewable area is 36 inches (2) Estimated retail price. Actual retail prices may vary. (3) 1-year parts and 1-year on-site labor

CONTACT: Compaq Computer Corporation

Brian Temple or Mike Berman, 281/514-0484

or

Miller/Shandwick Technologies

Kerry Kelly, 617/536-0470

or

Thomson Consumer Electronics

Frank McCann or James Harper, 317/587-4450