Today at the 2000 International CES, Microsoft Corp. previewed the next-generation Windows^® CE-based Palm-size PC software and gave the devices a new name: Pocket PCs. Hardware vendors that include Casio Computer Company Ltd., Compaq Computer Corp., Hewlett-Packard Co. and Symbol Technologies Inc. plan to support Pocket PC software in upcoming products expected to be available in the first half of this year. The Pocket PC software, previously code-named "Rapier," puts the best of the PC into a small device, providing users with the freedom to better manage their work and their life anywhere, any time.

"With Pocket PCs powered by Windows, we are continuing to change what people expect from a PDA," said Jonathan Roberts, general manager for Windows CE at Microsoft. "Pocket PCs can help people connect to their most essential information while away from their desks. By introducing advanced software and expandability, these devices can also help people make the most of their downtime."

Ted Clark, vice president of Compaq's iAppliances Division, part of its new Internet Products and Services Group, expanded on the significance of the Microsoft announcement, stating "This new operating system enables Compaq to deliver extremely cool Pocket PC products with the functionality that our customers are asking for."

In his CES keynote address, Microsoft Chairman and CEO Bill Gates demonstrated for the first time two compelling new applications that will ship with the Pocket PC: Microsoft^® Reader with ClearType™ display technology and the Microsoft Windows Media™ Player. These applications demonstrate how advanced software and powerful hardware, such as 32-bit microprocessors with plenty of core system memory and support for industry-standard expansion slots such as CompactFlash, combined with bright color screens and stereo output, will make Pocket PCs outstanding productivity devices. Pocket PCs are versatile and can be expanded to meet a broad range of customer interests and requirements.

"With the Pocket PC software, Microsoft has enhanced an already versatile platform, making it even easier to use and more essential as an everyday tool," said Helen Chan, worldwide marketing manager for HP's Asia Pacific PC Division.

The Microsoft Reader electronic book software is designed to deliver an on-screen computer reading experience that, for the first time, approaches the convenience and quality of reading text printed on paper. Microsoft Reader also adheres to the traditions and benefits of good typography. It offers a clean, uncluttered display; ample margins; proper spacing, leading and kerning; and powerful tools for book-marking, highlighting and annotation. Microsoft Reader includes a built-in dictionary as well as a library that can store and manage a large collection of books and other documents. It also features a flexible copy-protection system that allows publishers to distribute titles protected from piracy and illegal copying.

The Windows Media Player will provide consumers with access to music in Windows Media and MP3 formats from their own digital music library created with personal jukebox software or downloaded from the Internet. Consumers selecting the Windows Media format will get two hours of CD-quality playback on a typical 64MB device and one hour of playback using

MP3. The Windows Media Player also includes support for Microsoft's digital rights management (DRM) technology, which offers access to secure music from major record labels including Sony, EMI, BMG and Warner Music. Windows Media DRM allows music labels to protect their artists' rights and interests and, in turn, delivers a wider selection of Internet-based music to consumers.

Beginning in February 2000, the Windows Media Player will be available for download to existing Palm-size PCs, including the Casio E-100 and E-105, the Compaq 1530 and 2130 and the HP Jornada 430se Palm-size PC. Windows Media Player will ship preinstalled on Pocket PCs when they become available at retail later this year.