PERSONAL SYSTEMS The new HP will provide the leading-edge personal systems technology that customers have come to expect from both HP and Compaq. We will leverage the complementary brand and product strengths of the two companies to deliver an even better portfolio of end-to-end products, global solutions and integrated services to meet the needs of our customers. Our branding strategy builds on the strong equity in the HP brand across a broad range of technology and the strong equity in the Compaq brand for PCs worldwide.

Business PCs and Notebooks. Decision: Business desktop PCs and notebooks will migrate to the Compaq platform over the next 9-12 months. Both will carry the Compaq name. This will enable HP to leverage Compaq's strong market share and brand recognition in the commercial PC market. The HP Vectra products will be phased out in line with current published roadmaps, but we will continue to offer HP's highly successful e-pc line under the HP brand. The HP Omnibook products will continue to be offered through 2002.

Consumer PCs and Notebooks. Decision: We will continue to offer both the Compaq Presario™ and HP Pavilion lines of consumer desktop PCs and notebooks through all existing channels in regions where both brands are strong. In some countries, only one brand will be offered, depending on that country's specific requirements. Our goal is to minimize confusion and maximize choice for our customers.

The two brands will compete, and we will market the unique value proposition for each. Today, for example, Compaq has compelling offerings for home/wireless networking and HP has strength in digital imaging solutions. Maintaining both brands will enable HP to leverage existing brand awareness and preferences and give customers the opportunity to continue to buy the brand and products that best meet their needs. The decision to maintain two consumer brands of desktop PCs and notebooks is driven in part by feedback from our retail partners.

Workstations. Decision: We will incorporate the strength of Compaq's Windows NT workstations to form the industry's broadest, most comprehensive product line. HP will continue to drive 64-bit platform leadership for the most demanding applications with today's PA-RISC and upcoming workstations based on the Intel Itanium Processor Family. HP workstations will provide great value across the industry-leading 32- and 64-bit operations system environments: Windows, Linux and HP-UX.

Smart Handhelds. Decision: The Compaq iPAQ™ Pocket PC, re-named the HP iPAQ Pocket PC, will be our smart handheld platform. The best of the current HP Jornada technology will be engineered into the platform. Jornada products will be phased out of the market in 2002. HP will continue to innovate in wireless, mobility and voice technology. HP also will offer the iPAQ Blackberry device for end-to-end wireless e-mail solutions, under the HP brand.

Home and Wireless Networking. Decision: These solutions will be based on current Compaq products and re-branded HP. Our corporate networking solutions will range from wireless mobility solutions and industry-standard wireless LAN to Bluetooth solutions. For home networking, we will offer several choices, from Ethernet to wireless to phone line.

Thin Clients: Decision: HP will continue the Compaq line of thin clients, which will be re-branded HP. This line offers customers lower cost of ownership, improved end-user productivity and unparalleled security.

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