Compaq Outlines 1995 Highlights

HOUSTON, January 24, 1996 -- Following the announcement of its fourth
quarter and year-end sales and earnings, Compaq Computer Corporation
(NYSE:CPQ) outlined its corporate highlights from fiscal year 1995, in
which the company reported sales of $14.8 billion. The highlights span the
entire organization, from enterprise systems solutions to pre-school
products, and include strategic partnerships, corporate acquisitions,
innovative technology offerings and new senior executives.

SYSTEMS AND COMPAQ'S ENTERPRISE COMPUTING STRATEGY

During the year, Compaq took dramatic steps forward in its evolution as a
leading provider of products and services for the entire distributed
computing enterprise. Through a series of announcements made during
Innovate 95, Compaq's worldwide industry forum on enterprise computing,
the company unveiled new leadership server platforms, announced the
formation of strategic alliances, and outlined aggressive new service and
support, clustering and internetworking strategies.

Compaq announced a new strategy for providing world-class enterprise
service and support for customers that require global computing solutions.
The worldwide service and support strategy includes the introduction of
new Compaq-branded Service and Support Options, a strategic alliance with
Digital Multivendor Customer Services to become Compaq's Global Service
and Support Provider, new distribution channel service programs, and
significant new investments in Compaq's internal worldwide service and
support infrastructure. This strategy enables Compaq and its partners to
offer total and consistent service solutions to those customers with sites
all over the world.

In the fourth quarter, Compaq unveiled an internetworking business strategy
that enhanced its ability to provide tightly integrated enterprise-class
computing systems to its commercial customers. The company announced the
formation of an Internetworking Products Group, and a strategic
partnership with Cisco Systems, Inc., aimed at delivering the computer
industry's first integration of the leading internetworking technology
into a value-oriented industry-standard computer platform. To further
solidify its internetworking strategy, Compaq announced the acquisitions
of Thomas-Conrad Corporation, a privately-held provider of network
interface cards and hubs, and Networth, Inc., a leading supplier of Fast
Ethernet hubs, switches and related products.

Compaq also announced its server array product strategy which defines the
company's roadmap for building even larger and more powerful computer
systems by "clustering" industry-standard computers together. This
strategy -- which includes alliances with Tandem and Microsoft -- is of
extraordinary importance to Compaq customers that need to build massive
yet extremely cost-effective computing solutions as part of their own
competitive strategies.

Delivering mid-range functionality in its most powerful, most tightly
integrated server platforms to date, Compaq introduced new ProLiant 4500
and 1500 models, delivering breakthrough performance and functionality,
including the ProLiant 4500 NT/Array model -- the first server product to
ship with Microsoft BackOffice -- providing midrange-class performance and
the industry-leading price/performance customers are seeking for
line-of-business applications.

Another important element of Compaq's strategy to bring added value and
functionality to its customers is the tight and seamless integration of
server platforms with leading operating systems, databases and
applications. New versions of SmartStart -- Compaq's integration tool that
optimizes software/hardware configuration and simplifies installation and
delivery of reliable servers -- and Insight Manager -- Compaq's
application for managing network desktops and servers -- were also
announced during the year.

In November, once again underscoring the importance of industry
partnership, Compaq and Oracle demonstrated the industry's first parallel
database server technology running on industry-standard platforms. This
combination will provide customers with a highly-scaleable,
highly-available platform for running business-critical computing systems
in the distributed enterprise at prices significantly below currently
offered solutions.

COMMERCIAL DESKTOPS AND INTELLIGENT MANAGEABILITY

In the largest product introduction in the company's history, Compaq in
March announced more than 100 models of its next generation ProLinea and
Deskpro desktop PCs. The new Deskpros were the first products to deliver a
breakthrough set of desktop management tools and features that
dramatically reduce the total cost of PC ownership. Compaq's "Intelligent
Manageability" solutions are the result of bringing the company's
innovative server management technology to the desktop, combined with
joint development efforts with leading network software providers.

In August, the company once again raised the bar for the PC industry with a
series of new aggressively priced desktop PCs, strengthening its position
as the value leader in the PC marketplace.

Extending what was already the broadest range of commercial desktops in the
marketplace, Compaq in November launched new desktop PCs featuring the
latest technology, including Intel's Pentium Pro processor and a
rewriteable optical CD-ROM drive. These new PCs include the Compaq Deskpro
XL 6150, Compaq's most powerful desktop ever and the ProLinea 6150E which
offers powerful technology at affordable prices.

Once again underscoring the importance of partnerships, Compaq and Intel
announced a strategic alliance to develop and co-market integrated desktop
standards-based, real-time video conferencing solutions for the business
environment based on Intel's ProShare Personal Conferencing technology.
Compaq's relationship with Intel is expected to result in a broad,
multi-product array of interoperable conferencing solutions.

PORTABLES

In 1995, Compaq, the company that pioneered portable computing, made
significant progress in its drive to reassert its leadership in the
portable PC marketplace. The company launched its new, high-performance
LTE 5000 family of products, and introduced significant enhancements to
its Contura value line.

Offering customers one of the most powerful and flexible notebooks in the
industry, the LTE 5000 is a high-performance family of Pentium
processor-based notebook PCs that features an innovative modular design,
breakthroughs in flexibility, true 64-bit architecture, and the industry's
highest hard-drive storage and memory capacity.

In June, the company also added new models to its award-winning Compaq
Contura value-line of notebook PCs, featuring faster processors, larger
displays, higher capacity hard drives and more memory.

CONSUMER DIVISION

In 1995, Compaq established itself as a leading player in the rapidly-
growing retail PC arena with new industry-leading products, important
strategic alliances and the formation of its Consumer Products Division.

Early in the year, Compaq formed the Consumer Products Division as part of
its on-going effort to intensify the company's focus on consumer PCs and
the retail marketplace. Building on the tremendous success of Compaq's
family of Presario consumer PCs, the company introduced the industry's
first "quad-speed" CD-ROM drives on all Presario models early in the year,
and in the fourth quarter, introduced the next generation Presario 9500,
7100 and 5500 Series, featuring breakthroughs in audio and video
technology. Since their introduction in 1993, the success of Presario PCs
have catapulted Compaq to the forefront of the retail PC arena, and have
strengthened the company's commitment to make the PC the primary
education, entertainment and communications vehicle in the home. In
conjunction with the launch of the new Presarios, Compaq also launched a
bold advertising campaign focusing on the dramatic impact Compaq PCs are
having on people's lives.

Entering the exciting field of "edutainment" for the first time, Compaq
formed a strategic partnership with Fisher-Price, and just after the
quarter ended unveiled Wonder Tools, a broad new line of educational and
entertainment multimedia products that create a new dimension in play and
learning for preschoolers and families using their home PCs. Designed
specifically for children ages 3-7 and their families, Wonder Tools
includes three product categories: interactive computer toys,
preschool-appropriate peripherals, and stand-alone software titles for
children and families. The products are designed to be used with any
Windows-based PC, and are scheduled to be available in North America
during the second half of 1996.

Staking its claim in the emerging area of home automation, Compaq made an
equity investment in Intellon Corporation, a leading provider of
CEBus-compliant technology and tools widely used by manufacturers of
lighting controls, security systems, electric meters and consumer
electronics. The move was designed to accelerate the convergence of home
PCs and home automation technology, and further supports the PC as the
information, communications and control center in the home.

In the first half of 1995, the company also announced an equity investment
in PureSpeech, Inc. to develop new speech recognition products that will
greatly enhance the ease-of-use of PCs in the home.

WINDOWS 95

As Microsoft's Lead Systems Partner for Windows 95, Compaq played a primary
role in the development, testing and launch of Windows 95 in August.
Compaq spent the equivalent of 50 man-years testing Windows 95 for
compatibility and reliability, assuring customers that Compaq products
offer a smooth transition to Windows 95. Following the launch, Microsoft
armed its 400-person field sales force and engineering team with Compaq's
LTE Elite 5000 to demonstrate to its customers the features and advances
provided by Windows 95.

COMPAQ BACKGROUND

Compaq Computer Corporation is the world's largest supplier of personal
computers, offering desktop PCs, portable PCs, servers and options. Compaq
products are sold and supported in more than 100 countries throughout the
world. Compaq also sells 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 On- line, CompuServe,
Internet (http://www.compaq.com), and Prodigy, or by calling
1-800-345-1518.
 
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