HP Media Center PC Lineup Now Available for Entertainment Enthusiasts -- Just in Time for the Holidays.

Business Editors/High-Tech Writers

PALO ALTO, Calif.--(BUSINESS WIRE)--Oct. 29, 2002

HP (NYSE:HPQ) today announced its full line of HP Media Center PC models with Microsoft(R) Windows(R) XP Media Center Edition, now available in retail stores and online at hpshopping.com.

"HP is introducing a new consumer technology category this holiday season with the launch of our PC-based entertainment system for the home," said Carly Fiorina, HP chairman and chief executive officer. "The HP Media Center is a new way for people to experience their favorite pastimes, whether it's watching DVDs, listening to music, watching TV, sharing and managing digital photos, or all of the other things PCs are normally used for, in one easy-to-use, integrated system."

The new Microsoft Windows XP Media Center Edition allows the HP Media Center PC user to enjoy digital entertainment -- including live television with free electronic program guide, up to 90 hours of personal video recording (PVR), digital music, digital video, DVDs and pictures -- in an easy-to-use, remote-controlled interface similar to the simple, point-and-choose menu screens found on today's DVD movies.

Intended to be used with a PC monitor, the HP Media Center PC also can connect to a TV for a large-screen viewing experience in spaces where consumers would want both a PC and entertainment solution -- such as a den, game room, teenager's bedroom, dorm room or small apartment.

"The HP Media Center PC powered by Windows XP Media Center Edition greatly enhances the ability of consumers to use their PC for both work and play," said Bill Gates, chairman and chief software architect, Microsoft. "This newest member of the Windows XP family enables consumers to enjoy the best of what digital entertainment has to offer, and takes us into an exciting new era of personal computing."

Powered by Intel(R) Pentium(R) 4 processors, all three new HP Media Center PC models feature HP's exclusive six-in-one media card reader on the front panel to quickly and easily transfer digital data from all common flash media formats.

The power and design of the new HP Media Center PC makes photo editing and home movie creation convenient and fun, with all models featuring either a DVD+R/+RW or CD-RW drive to store content digitally. DVD+RW writes more than twice as fast as competing formats and is viewable on many DVD players and DVD-ROM drives.(1)

HP Media Center PCs also include a variety of valuable software programs such as the intuitive HP Pictures and Video Toolkit, which features ArcSoft Showbiz video editor, PhotoImpression, Greeting Card Creator and FunHouse software, Sonic MyDVD, as well as the HP Memories Disc Creator for complete home photography and video editing capabilities.

"The HP Media Center PC is one of the first all-in-one digital entertainment systems, making it perfect for students and other consumers who are media-hungry but space-constrained," said Paul Otellini, president and chief operating officer, Intel. "The power of the Pentium 4 processor delivers the high performance needed for a best-in-class media experience."

HP also partnered with other top industry leaders to ensure HP Media Center PC users receive an outstanding entertainment experience. All HP Media Center PCs feature an NVIDIA 64 MB GeForce4 MX420 graphics card to ensure a high-quality visual digital experience, whether watching DVDs, editing video or playing favorite 3D PC games.

Creative Labs' SoundBlaster Audigy 5.1 multi-channel sound card delivers stunning 24-bit audio playback with multi-channel audio quality, and select HP Media Center PC models also include Klipsch ProMedia THX-certified surround sound speakers that combine for an incredible sound that rivals today's finest home theater and consumer electronics offerings.

HP Media Center PC Line

The HP Media Center PC line includes three models. The 873n retail model will be offered on-shelf in retail outlets across the United States and Canada, while the value-priced 863n and power-packed 883n will be available direct from HP through retail kiosks or hpshopping.com.

All HP Media Center PCs include the HP remote control, DVD+R/+RW or CD-RW drives, a floppy drive, a PVR TV tuner card, a Media Center keyboard with easy-access to entertainment features and volume control knob, an infrared (IR) receiver, TV-out, one front-access and four rear-access USB 2.0 ports, one front-access and one rear-access IEEE 1394 port, an IR blaster to control a set-top box, a 10/100 Base-T network interface and an optical mouse.

In addition to the features mentioned above, the affordable HP Media Center PC 863n is powered by an Intel Pentium 4 2.4-GHz processor and includes 512 MB DDR memory and an 80 GB hard drive for storing digital libraries, as well as CD-RW and DVD-ROM drives for burning CDs and watching movies. Available beginning Nov. 3 through retail store kiosks and hpshopping.com, the HP Media Center PC 863n is priced at $1,349.(2)

The HP Media Center PC 873n includes an Intel Pentium 4 2.53-GHz processor, 512 MB DDR memory, a huge 120-GB 5,400-rpm hard drive, a DVD+R/+RW drive, a CD-ROM drive and Klipsch ProMedia 2.1 THX-certified 200-watt speakers. The HP Media Center PC 873n is available today in retail stores and at hpshopping.com for an estimated U.S. street price of $1,649.(2)

The powerful HP Media Center PC 883n includes an Intel Pentium 4 2.66-GHz processor, 512 MB DDR memory, 120-GB 7,200-rpm hard drive with plenty of room to store digital music, images and video files, a DVD+R/+RW drive, a CD-ROM drive and Klipsch ProMedia 5.1 THX-certified 500-watt speakers. The HP Media Center PC 883n is available today online for $1,999.(2)

Availability

The HP Media Center PC is available in store at Best Buy, Circuit City, CompUSA and HP retail kiosks in the United States, at Future Shop and Best Buy in Canada and direct from HP online at hpshopping.com. Additional information on the HP Media Center PC is available at http://www.hp.com/go/mediacenterpc and on http://www.hpshopping.com.

About HP

HP is a leading global provider of products, technologies, solutions and services to consumers and businesses. The company's offerings span IT infrastructure, personal computing and access devices, global services and imaging and printing. HP completed its merger transaction involving Compaq Computer Corp. on May 3, 2002. More information about HP is available at http://www.hp.com.

(1) Based on Intellikey Labs DVD recordable media test report, Sept.19, 2002.

(2) Estimated U.S. street prices. Actual prices may vary.

Microsoft and Windows are U.S. registered trademarks of Microsoft Corp. Intel and Pentium are U.S. registered trademarks of Intel Corp.

This news release contains forward-looking statements that involve risks, uncertainties and assumptions. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. Risks, uncertainties and assumptions include the possibility that the market for the sale of certain products and services may not develop as expected; that development of these products and services may not proceed as planned; and other risks that are described from time to time in HP's Securities and Exchange Commission reports, including but not limited to HP's quarterly report on Form 10-Q for the quarter ended April 30, 2002 and reports filed subsequent to HP's annual report on Form 10-K, as amended on January 30, 2002, for the fiscal year ended October 31, 2001. If any of these risks or uncertainties materializes or any of these assumptions proves incorrect, HP's results could differ materially from HP's expectations in these statements. HP assumes no obligation and does not intend to update these forward-looking statements.