COMPAQ ANNOUNCES SWEEPING PRICE CUTS, LAUNCHES 133 MHZ PENTIUM
PROCESSOR-BASED PCS IN MOVE TO EXTEND WORLDWIDE PC MARKET LEAD

Compaq today moved to extend its lead in the worldwide PC market:

Announced aggressive price reductions of up to 25 percent across its
commercial and consumer desktop product families;

Introduced nine new commercial desktop computers based on the 133 MHz Intel
Pentium microprocessor, the fastest available today;

Raised the standard minimum hard drive size from 270 MB to 630 MB
throughout its commercial desktop families, strengthening its position as
the clear value leader in the PC marketplace;

Leveraged its strategic role as the Lead Systems Partner for Windows 95 to
lead the way in addressing Windows 95 market opportunities.

HOUSTON, August 16, 1995 -- In a bold move to extend its lead in the
worldwide PC marketplace, Compaq Computer Corporation (NYSE: CPQ) today
made sweeping new product and pricing announcements that raise the bar for
PC value and performance and position the company to leverage the strong
wave of PC buying analysts expect in the second half of 1995. Compaq
announced aggressive price reductions of up to 25 percent across its
commercial and consumer desktop product families, and introduced nine new
desktop computers based on 133 MHz Pentium chips -- the fastest
microprocessor available today. Compaq also raised the standard minimum
hard drive size throughout its commercial desktop families, strengthening
its position as the clear value leader in the PC marketplace.

"By combining quality and useful innovation with aggressive prices, Compaq
is aiming to recast the competitive PC landscape with a barrage of new
aggressively priced products," said Compaq President and Chief Executive
Officer Eckhard Pfeiffer. "Compaq re-wrote the book in 1992 when it comes
to value and performance, and with these aggressive price reductions,
powerful new desktop PCs, and sweeping product enhancements, we're adding
a new chapter."

Building on its leadership position in the worldwide PC industry and its
strategic role as the Microsoft Lead Systems Partner for Windows 95,
Compaq is moving to further increase its marketshare. In the second
quarter, "Compaq has outpaced all rivals by nearly 400,000 shipments and
is well-positioned to lead the market at year end for the second
consecutive year," according to Philippe de Marcillac, vice president and
chief analyst of Dataquest, one of the industry's leading market research
firms (NOTE 1).

"Today's announcement is another milestone in our commitment to extend our
lead in the global PC marketplace," said Pfeiffer. "In our quest to become
the world's leading computer company, we will continue to offer even more
solutions that address the needs of a wide range of customers, from the
world's largest corporations to first-time PC buyers."

Price Reductions

Compaq has reduced prices throughout both its commercial and consumer PC
product families by up to 25 percent, offering customers more power and
functionality at lower prices than competing products. For example, a 75
MHz Pentium processor-based Compaq ProLinea with 8 megabytes (MB) RAM, 256
KB cache and a 630 MB hard drive now costs $1,599 (NOTE 2). A comparable
Dell OptiPlex model (X500 series) with only a 365 MB hard drive is priced
at $1,650 (NOTE 3) and Hewlett Packard Vectra VL3 with a 420 MB hard drive
costs $1,799 (NOTE 4).

In another comparison, a Compaq Deskpro XL with a 90 MHz Pentium processor
and 16 MB RAM, 256 KB cache and a 1 gigabyte (GB) hard drive now costs
$3,199, significantly less than Dell's comparable OptiPlex model (DGX
series) which is priced at $3,550 (NOTE 5) and Hewlett Packard's Vectra XU
5/90C, which was recently reduced to $3,345 (NOTE 6).

Compaq has also reduced pricing across all models of its popular Presario
desktop product line. The Presario pricing reductions range from $200 on
the Presario CDS 744 to $600 on the powerful 100 MHz Pentium
processor-based Presario CDS 992. For example, the Compaq Presario CDS 974
with a 75 MHz Pentium processor and 725 MB hard drive, formerly available
at $2,199, is reduced to $1,799, a decrease of 18 percent.

New Pentium Processor-based 133 MHz Models

Compaq is the first manufacturer to incorporate the new 133 MHz Intel
Pentium microprocessor across its entire business desktop product line,
including the company's highly successful ProLinea, Deskpro and Deskpro XL
desktop PCs. Nine new high-performance 133 MHz Pentium processor-based
models with 16 MB of memory and 1 GB hard drives will be available in
volume by the end of the third quarter.

"With today's announcements, Compaq has reshaped its entire desktop product
line, ramping up our transition to Pentium processors and -- more
importantly -- restaking our claim as the clear value and performance
leader," said Pfeiffer.

Compaq's new 133 MHz desktops include two additions to the ProLinea, five
additions to the Deskpro, and two additions to the Deskpro XL families of
desktop PCs.The new Compaq ProLinea 5133 models, designed for mainstream
customers, start at $2,899. The new Compaq Deskpro 5133 models, which
deliver Intelligent Manageability -- a unique set of features that enable
customers to better manage computers on their networks and lower their
cost of ownership, start at $3,099. The new Compaq Deskpro XL 5133 models,
designed for the most demanding business applications such as computer
aided design and sophisticated financial analysis, start at $3,799.

Increased Minimum Hard Drive

While drastically reducing prices across its PC product families, Compaq
has further increased commercial desktop value by raising the standard
minimum hard drive size throughout its ProLinea and Deskpro product
families. These higher capacity disk drives -- widely available in
September -- allow customers to easily accommodate the more robust
operating systems and applications that are becoming available. The 270 MB
standard minimum hard drive models in both product families have been
raised to 630 MB, and the highest capacity models are now at 1 GB.

Windows 95 Leadership

Analysts expect many PC users to upgrade their hardware as they transition
to new operating systems like Windows 95. Today's aggressive product and
pricing announcements -- together with Compaq's position as the Lead
Systems Partner for Windows 95 -- fuel the company's drive to lead the way
in addressing customer demand. Compaq and Microsoft worked closely
throughout the development of Windows 95, investing more than 50 man-years
in joint testing and development. Earlier this year, Compaq introduced new
desktop PCs designed to take full advantage of the unique capabilities
offered with Windows 95 including Compaq's Intelligent Manageability, a
collection of breakthrough desktop management tools and features that
dramatically reduce the total cost of PC ownership.

For the past 14 months, Compaq has been shipping Windows 95-ready products
and products with Plug and Play capabilities including the best selling
ProLinea, Deskpro, Deskpro XL, LTE Elite, Contura and the Presario line of
consumer PCs.

Company Background

Compaq Computer Corporation is the world's largest supplier of personal
computers, offering desktop PCs, portable PCs and servers. Founded in
1982, the company reported 1994 worldwide sales of $10.9 billion. Compaq
products are sold and supported in more than 100 countries through a
network of more than 38,000 Compaq marketing partners. 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 Online, CompuServe, Internet (http://www.compaq.com),
and Prodigy, or by calling 1-800-345-1518.

NOTES 1: Dataquest press release, Aug. 7, 1995, "Compaq Tops
         Dataquest's Worldwide PC Shipment List for Sixth Consecutive
         Quarter"
      2: All prices are estimated selling price; actual prices
         will vary.
      3: Advertisement, PC World, August 1995, back page, $1,949,
         less Dell's $299 credit for monitor
      4: Advertisement, PC World, August 1995, page 206
      5: Dell Direct Sales price quote,  8/15/95
      6: As quoted by HP reseller, 8/15/95
 
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