COMPAQ ANNOUNCES ACROSS-THE-BOARD CUTS IN SERVER PRICING -- WORLDWIDE
MARKET SHARE LEADER ALSO LOWERS SERVER HARD DRIVE PRICES

HOUSTON, July 10, 1995 -- Continuing to underscore its corporate commitment
to deliver best-in-class products at competitive prices, Compaq Computer
Corporation (NYSE: CPQ) today announced across-the-board price reductions
on all servers which ship with pre-installed hard drives, and announced
price reductions of up to 29 percent on its server hard drive options.
This announcement makes the best selling servers on the market even more
affordable.

Today's across-the-board price reductions, which affect hard drive models
of the Compaq ProSignia 300; Compaq ProSignia 500; Compaq ProLiant 1500;
and Compaq ProLiant 4500 families, keep the company strongly positioned to
gain additional share in the server market during the second half of 1995.
According to industry analyst firm International Data Corporation and
Compaq estimates, in the first quarter of 1995 Compaq gained share and led
the industry by shipping 37 percent of all PC-based servers worldwide.
Also according to International Data Corporation, Compaq's share in the
super-server market, which includes enterprise-capable systems such as the
recently introduced Compaq ProLiant 4500, reached over 70 percent.

The company said price reductions on hard drive options were taken to
ensure Compaq hard drives remain competitively priced with drives
available on the open market. Compaq hard drives are rigorously tested and
must pass a strict and exhaustive quality certification process before
Compaq will ship the drive. Only drives which pass this certification
process are supported under Compaq's Pre-Failure Warranty (NOTE 1). The
Pre-Failure Warranty, effective for three full years, allows customers to
replace drives which are about to fail before the failure actually occurs.
Customers are alerted in advance to the probability of a drive failure
through Compaq's server management utility called Compaq Insight Manager.
Compaq Insight Manager comes standard with every Compaq system and can be
found on the Compaq SmartStart (NOTE 2) CD-ROM. Third-party drives
installed in Compaq systems aren't supported under Compaq's Pre-Failure
Warranty or under the more comprehensive Compaq SystemCare service and
support program. Price Reduction Details

Compaq reduced prices on hard drives ranging in capacity from 1.05GB to
4.3GB. A 1.05GB Fast-SCSI-2 hard drive previously priced at $688 is now
priced at $577 (NOTE 3), a reduction of 16 percent. A 4.3GB Fast-SCSI-2
hard drive previously priced at $2,610 is now priced at $1,854, a
reduction of 29 percent.

Compaq reduced server prices by up to eight percent on all servers,
including rack-mountable models, which ship with a pre-installed hard
drive. A ProSignia 300 5/75 Model 2100 previously priced at $4,043 is now
priced at $3,821, a reduction of five percent. A ProSignia 500 5/90 Model
2100 previously priced at $4,932 is now priced at $4,710, a reduction of
five percent. A ProLiant 1500 5/75 Model 4200A previously priced at $9,839
is now priced at $9,384, a reduction of five percent. A ProLiant 4500
5/100 Model 8600A previously priced at $18,776 is now priced at $17, 231,
a reduction of eight percent.

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 DirectPlus 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.

NOTE 1: The Compaq Pre-Failure Warranty is valid only with Compaq-certified
hard drives used in conjunction with the Compaq SMART SCSI Array
controller and Compaq Insight Manager.

NOTE 2: Compaq SmartStart, the Compaq integration tool for installing and
integrating reliable servers, ships standard with every Compaq server.

NOTE 3: All prices are estimated street prices; actual prices will vary.
 
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