Compaq and Thomson to develop new generation of home entertainment products; Industry leaders team up to accelerate convergence in the home.

ORLANDO--(BUSINESS WIRE)--May 22, 1996--Market leaders Compaq Computer Corporation (NYSE:CPQ) and Thomson Consumer Electronics (RCA, ProScan and GE brands) today announced that they will jointly develop a new generation of home entertainment products that combine the ease of use of consumer electronics with the interactivity of personal computers.

The relationship brings together leaders from two separate industries that combined offer a unique perspective to developing a broad line of convergence products -- the blending of consumer electronics, information and personal computing.

"Compaq and Thomson have a shared vision of convergence that will usher in a new era in the way consumers receive and interact with entertainment and information services," said Michael D. Heil, senior vice president and general manager, Consumer Division, Compaq Computer Corporation. "This partnership is a natural fit. It creates tremendous synergy between two companies that have complementary strengths in leading brand names, manufacturing, product development and marketing resources. The result will be breakthrough convergence products that redefine entertainment value for consumers."

"The new convergence category is the future of both of our businesses," said Joseph P. Clayton, Thomson's executive vice president, marketing and sales, Americas & Asia. "Today's announcement opens the door for both industries to participate in a new generation of products that create additional business opportunities for manufacturers and retailers."

"We envision an initial direction of highly featured products that will particularly appeal to video enthusiasts and computer-experienced consumers who enjoy the home theater experience. Internet capability will be just one application that will transform the private experience of the PC to an entertainment and information experience that can be shared by the entire family," said Clayton.

Given the respective strengths of Compaq and Thomson in the PC and TV markets, the new alliance will focus first on unleashing the potential for a new consumer medium that is the ultimate byproduct of these two devices. Compaq and Thomson plan to work closely with key consumer electronics, computer, content and broadcast firms to define this emerging category.

Joint Compaq and Thomson teams have been working together to develop products for the first half of 1997. While no formal product announcements are being made at this time, concept demonstrations are being held at the Consumer Electronics Show here that runs from May 23-25.

Company Backgrounds

Compaq Computer Corporation is the world's largest supplier of personal computers, offering desktop PCs, portable PCs, servers and options. The company reported 1995 worldwide sales of $14.8 billion. Compaq products are sold and supported in more than 100 countries through Compaq marketing partners and sold directly to customers through Compaq Direct Plus at 1-800-888-5858. Compaq provides 24- hour customer support and can be reached through the Compaq forums on America Online, CompuServe, Internet (http://www.compaq.com), and Prodigy, or by calling 1-800-OK-COMPAQ. Product information and reseller locations can be obtained by calling 1-800-345-1518.

Thomson Consumer Electronics, with over 10,000 U.S. employees, is the nation's leading consumer electronics manufacNDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS

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