Compaq Takes Commanding Lead in Pocket PC Market Now Available Through All Channels, iPAQ Pocket PC Offers Upgrade Path

To Future Pocket PC Software

    HOUSTON, July 26 /PRNewswire/ -- Compaq Computer Corporation (NYSE:   CPQ)
 today announced that its extremely popular, award-winning iPAQ Pocket PC
 continues to fuel the company's next generation of Internet access with nearly
 half a million units shipped in the second quarter, giving Compaq a commanding
 lead in the Windows CE market(1).
     "If you've been waiting to buy an iPAQ Pocket PC, wait no more -- there's
 never been a better time to buy an iPAQ," said Sean Burke, vice president and
 general manager, iPAQ Products and Connected Devices Division.
     "The iPAQ Pocket PC is now available through all major commercial channels
 and retailers, and for the first time, the H3650 has been added to our own
 DirectPlus website for immediate purchase.  We're also offering a 'Cash in
 Hand' $50 rebate on the iPAQ Pocket PC H3635," Burke continued.
     Customers can be assured that any iPAQ Pocket PC purchased today is
 upgradeable to future Pocket PC software -- a feature unique to the iPAQ.
     Industry analysts confirm the iPAQ Pocket PC's continuing appeal,
 particularly among business customers.  "A growing number of new users and
 users who are upgrading want better messaging capabilities, such as access to
 e-mail, short message services, wireless LAN or integration of a PDA with a
 mobile phone," Todd Kort, principal analyst of Gartner Dataquest's Computing
 Platform Worldwide group.
     "Our projected numbers indicate the iPAQ Pocket PC overtook Palm in terms
 of revenue for the second quarter.  We believe this is largely due to the
 product's appeal to corporate users because of its better connectivity with
 Microsoft programs like Outlook, Word and Excel, supplemented by its extremely
 strong multimedia and gaming capabilities," Kort added.
     The Compaq iPAQ Pocket PC has been overwhelmingly popular since its
 introduction last year.  The iPAQ was named The World's Most Powerful PDA by
 the Guinness Book of World Records, due to its outstanding set of features and
 its vivid, high-resolution color screen that can be seen in any light.
     In addition, the iPAQ Pocket PC is the industry's most robust handheld
 product for wireless applications.  Using flexible Expansion Packs supporting
 PC Cards or Compact Flash devices, customers can select the wireless solution
 that is right for them -- including Compaq's own iPAQnet suite of wireless
 Internet solutions -- while providing a migration path for future wireless
     The iPAQ Pocket PC H3650, offering 32 megabytes of RAM standard, is now
 available for $499 on the Compaq DirectPlus website at /, or by calling 1-800-888-9909.  Other
 models are also available, including the H3670 color unit with 64MB of RAM
 standard.  For information on the H3635 "Cash in Hand" mail-in rebate, please
 see .
     Company Background
     Founded in 1982, Compaq Computer Corporation ("Compaq") is a leading
 global provider of enterprise technology and solutions.  Compaq designs,
 develops, manufactures and markets hardware, software, solutions and services,
 including industry-leading enterprise storage and computing solutions, fault-
 tolerant business-critical solutions, communication products, and desktop and
 portable personal computers that are sold in more than 200 countries.
 Information on Compaq and its products and services is available at .
     Compaq, the Compaq logo, and iPAQ are trademarks of Compaq Information
 Technologies Group, L.P.  Product names mentioned herein may be trademarks
 and/or registered trademarks of their respective companies. This press release
 may contain forward-looking statements based on current expectations that
 involve a number of risks and uncertainties.  The potential risks and
 uncertainties that could cause actual results to differ materially include:
 worsening global economic conditions, increased competitive environment and
 pricing pressures, disruptions related to restructuring actions and delays in
 the expansion of Compaq's solutions business model.  Further information on
 these factors and other factors that could affect Compaq's financial results
 is included in Compaq's Securities and Exchange Commission (SEC) filings,
 including the latest Annual Report on Form 10-K and the Quarterly Report on
 Form 10-Q, which will be filed shortly.
      (1) According to Gartner Dataquest preliminary second quarter 2001
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SOURCE Compaq Computer Corporation

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