Compaq today announced:

• Price reductions of up to 11 percent on all flagship Deskpro XL products
• Price reductions of up to 18 percent on most mid-range Deskpro XE products
• Price reductions of up to 22 percent on most value-line ProLinea products
• Price reductions of up to 17 percent on current Contura and Contura Aero models
• Increased availability for most ProLinea, Deskpro XE and Deskpro XL models

HOUSTON, August 15, 1994 -- In yet another major step to become the number one market share leader by 1996, Compaq Computer Corporation (NYSE:CPQ) today reduced prices (NOTE 1) by up to 22 percent for virtually the entire line of Deskpro XL, Deskpro XE and ProLinea personal computers. Compaq is also reducing prices by up to 17 percent on most of the current Contura and Contura Aero products.

These price reductions arrive as Compaq enters the strong computer buying season from September through December, and they will allow Compaq -- the acknowledged PC industry value leader -- to continue offering all customers extraordinarily competitive values across the entire product line.

At the same time, Compaq announced that it now offers greater product availability across most of the commercial desktop line -- from the value-priced ProLinea to the network-ready flagship Deskpro XL.

"Commercial customers have been telling us that their first choice is Compaq, and these new prices will make our products even more appealing to a wider audience," noted Ross Cooley, Senior Vice President for North America, Compaq Computer Corporation. "In the past, customers sometimes could not find the Compaq desktop configurations or the quantities they really needed. Now, that issue is, for the most part, solved -- and at a more affordable price. So there's going to be an even higher level of customer satisfaction as we deliver the right product at the right price at the right time."

Desktop Price Reductions

All flagship Compaq Deskpro XL models carry price reductions of 7 to 11 percent, bringing even greater value to the corporate buyer. For example, a Pentium-based Compaq Deskpro XL 560 Model 270/w, previously selling for about $3,299 now sells for about $2,999 -- a $300 reduction.

Introduced in April, 1994, the Deskpro XL replaced the highly successful Deskpro/M family as Compaq's most flexible and powerful PC. It is one desktop PC that can really meet the needs of both the corporate user, who asks for the highest performance and productivity, and the MIS professional, who demands network-ready easy setup, plus expandability and value. For the user, it offers powerful Intel Pentium microprocessors and 90 million Winmark (NOTE 2) QVision graphics on the PCI (NOTE 3) local bus. For the MIS manager, it has a host of integrated features -- including a PCI local bus NIC (NOTE 4), Fast SCSI-2 (NOTE 5) controller and pre-installed Windows, making it among the easiest to buy and setup.

All Compaq Deskpro XE models, with the exception of the Deskpro 4100 models, have similar reductions of 7 to 18 percent. For example, a 486DX2/66-based Deskpro XE 466 Model 270/w (NOTE 6), previously selling for about $2,299, now sells for about $1,949 -- a 15 percent reduction.

All Compaq ProLinea computers, with the exception of the ProLinea Net1 models, are reduced by 4 to 22 percent. For example, the ProLinea MT 4/50 Model 340/w (NOTE 7), previously selling for about $1,749 now sells for about $1,499 -- a 14 percent reduction.

Portable Price Reductions

All current Compaq Contura Aero subnotebook computers are reduced by up to 17 percent. For example, the Contura Aero 4/33C Model 170, previously selling for about $2,095 (NOTE 8), now sells for about $1,799 -- a 15 percent reduction. Through the end of the year, the PCMCIA floppy drive option for the Contura Aero is specially priced at $99.

Effective August 1, most of the current Compaq Contura value-line notebook computers and selected modem options were also reduced. For example, the Contura 4/25c Model 120, previously selling for about $2,149 (NOTE 9) , now sells for about $1,999. And the award-winning active matrix Contura 4/25CX Model 209 is now available at about $2,699 (NOTE 10) -- an extraordinary value for an active-matrix notebook.

Product Line Background

Compaq offers different computers for different types of markets and customers.

In the desktop marketplace, Compaq delivers computers through the retail channels under the Compaq Presario brand and through the commercial channels under the Compaq ProLinea and Compaq Deskpro brands. The products affected by this pricing announcement are all ProLinea, ProLinea MT, Deskpro XL, and most Deskpro XE. ProLinea Net1 and Deskpro XE 4100 models are not affected:

===========================================================================
                Value           Mid Range       Flagship
===========================================================================
Commercial:
  All-in-one    ProLinea Net1
  Desktop       ProLinea        Deskpro XE      Deskpro XL
  Mini-tower    ProLinea MT

Retail:
  All-in-one    Presario 400    
  Desktop       Presario 600
  Mini-tower    Presario 800
===========================================================================

In the notebook marketplace, Compaq delivers computers through the retail channels under the Compaq Contura brand and through the commercial channels under the Compaq Contura and Compaq LTE brands. The products affected by this month's price reductions are the Contura Aero and Contura families:

===========================================================================
                Value           Flagship
===========================================================================
Commercial:
  Subnotebook   Contura Aero
  Notebook      Contura         LTE Elite

Retail:
  Subnotebook   Contura Aero
  Notebook      Contura
===========================================================================

Company Background

Compaq Computer Corporation is a world leader in the manufacture of servers, and desktop, portable, and notebook personal computers. Founded in 1982, the Company reported 1993 worldwide revenues of $7.2 billion. Compaq products are sold and supported in more than 100 countries through a network of more than 31,000 Compaq marketing partners. Compaq also sells directly to customers through Compaq DirectPlus at 1-800-888-5858. For information on Compaq products, call 800-345-1518. Users needing technical support for Compaq products can call 1-800-OKCompaq.

NOTE  1: All prices are estimated selling prices; actual prices may vary.
      2: WinBench 3.11 results at 1024x768x256 colors on Deskpro XL 566
         Model 535\w with 16 MB RAM
      3: Peripherals Connection Interface
      4: Network interface controller
      5: Small Computer Systems Interface
      6: Includes 486DX2/66 processor, 8 MB RAM, 270 MB hard drive, MS-DOS
         6 and Windows 3.1
      7: Includes 486DX2/66 processor, 4 MB RAM, 340 MB hard drive, MS-DOS
         6 and Windows 3.1
      8: Includes 486SX/33 processor, 4 MB RAM, 170 MB hard drive, MS-DOS
         6, Windows 3.1 and more.
      9: Includes 486SX/25 processor, 4 MB RAM, 120 MB hard drive, MS-DOS
         6, Windows 3.1 and more.
     10: Includes 486SX/25 processor, 4 MB RAM, 209 MB hard drive, MS-DOS
         6, Windows 3.1 and more.