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July 1, 1998

Microsoft, Hitachi Announce Strategic Alliance On Windows CE Platform

- Hitachi to Create Development Organization Focused on Mobile, Consumer and Real-Time Applications for Windows CE With Cooperation from Microsoft -

Both companies see immediate opportunities for its customers in three areas:

• Continuous evolution of PC Companion products. Hitachi was one of the first supporters of the Handheld PC, and has just recently released its second generation H/PC. Moving forward both companies will work on providing additional PC Companion products around the Hitachi's 32 bit SuperH^TM RISC microprocessor.
• Development of a home multimedia station that can manipulate, integrate, store and play digital data from various sources, including TV, satellite broadcasts, the Internet, digital cameras, local storage media and DVD.
• Real-time capabilities. Microsoft has already announced that it will incorporate hard real-time capabilities into Windows CE. Hitachi´ s expertise in this area, together with its DARMA (Dependable Autonomous Hard Real-time Management) Technology^* will also provide customers with additional hard real-time solutions based on Windows CE.

Dr. Tsutomu Kanai, president and representative director of Hitachi, Ltd., said, "The reason why Hitachi selected Windows CE is because of its synergy with Windows NT and its potential for the future. Microsoft is a worldwide leader in software for office and home computers with its Windows family of operating systems. Hitachi is one of the world's largest companies covering a wide range of markets and product applications including enterprise systems, consumer products, real- time industrial control systems and electronic components. Through the combined strengths of the two companies, we envision an environment of seamless data networks across user environments and product areas."

"We are very excited about this new level of cooperation between Microsoft and Hitachi," said Bill Gates, chairman and CEO of Microsoft. "The real beneficiaries of this combined effort will be the businesses and consumers who, in coming years, will be able to incorporate these new products into their daily lives and benefit from the increased productivity and entertainment provided by these connected, intelligent digital devices."

Hitachi has been a key supplier of technology for Windows CE since its introduction. The SuperH^TM microprocessor is used by 6 of the 10 OEM suppliers of Handheld PCs, and Hitachi's development boards are used by many hardware firms for their Windows CE development efforts.

Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world´s leading global electronics companies, with fiscal 1997 (ending March 31, 1998) consolidated sales of 8,417 billion yen (63.8 billion dollars^**). The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment. For more information on Hitachi, Ltd. please visit Hitachi´ s Web site at http://www.hitachi.co.jp.

Founded in 1975, Microsoft (NASDAQ "MSFT") is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of computing every day.

^* DARMA or Dependable Autonomous Real-time Management Technology, developed by Hitachi, contributes to extracting the best of Windows Operating System while maintaining the legacy software compatibility, fault tolerant system operation and overnight system failure analysis and fix.

^** At an exchange rate of 132 yen to the dollar.

-Microsoft, Windows and Windows NT are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

-SuperH is a trademark of Hitachi, Ltd.

-Other product and company names are trademarks of their respective owners.

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