Dataquest and PC Data Research Studies Place U.S. Robotics PalmPilot at Lead of Thriving Handheld Computer Market

Mountain View, Calif. -- May 12, 1997 -- U.S. Robotics® (NASDAQ: USRX) today announced that two independent market research studies name the PalmPilot^TM connected organizer as the leader in the burgeoning handheld computer marketplace, just one year after the product began shipping. Leading computer research firms Dataquest and PC Data show U.S. Robotics' PalmPilot holding a 51% share of the standard handheld computer market and a 70% share of U.S. retail sell-through of PDAs and HPCs; a very strong position in a market that is estimated to grow to 2 million units this year, and 5 million units by 2000.

Dataquest's study, which separates the handheld computer category into standard handhelds and expandable organizers, states that the PalmPilot holds 51% of the standard handheld market. In addition to the PalmPilot, the standard handheld grouping includes the Apple Newton and the Microsoft Windows CE-based products. Dataquest predicts that the overall market for handhelds will grow to over 5 million units by the year 2000.

The PC Data study tracks retail sales of PDAs (personal digital assistants), including the Apple Newton, Psion, and Hewlett-Packard products, and HPCs (handheld PCs), including products from Compaq, Casio, and NEC. PC Data accords the U.S. Robotics PalmPilot 88% market share among PDAs, and 70% marketshare among the larger category of HPCs and PDAs.

"U.S. Robotics' Pilot has defined the size, weight, and functionality requirements for the truly successful handheld, and in doing so, has re-started the handheld marketplace," said Mike McGuire, Dataquest's industry analyst for mobile computing. "This commercial popularity also has attracted an enthusiastic developer community, which is turning the PalmPilot and its Palm OS into an increasingly powerful platform."

Two new models of U.S. Robotics' popular Pilot, the PalmPilot Professional and PalmPilot Personal, were introduced March 10, 1997. The PalmPilot Professional edition includes e-mail connectivity software, expense tracking software, a backlit screen, enhanced PalmPilot PIM software, and 1 MB of memory, and sells for $399. The PalmPilot Personal edition features the same expense management software, backlit screen, and enhanced PIM software, and includes 512K of memory, for the groundbreaking price of $299.

The PalmPilot is based on the Palm Operating System (Palm OS ^TM), a handheld computer operating system platform that enables low-cost, low-power, small form-factor devices to integrate seamlessly with desktop personal computers. The Palm OS features highly efficient operating system software for the handheld, and HotSync^TM, the desktop software that manages synchronization of the handheld with the PC.

PalmPilot is distributed through leading consumer electronics and office supply stores nationwide, including Circuit City, CompUSA, Computer City, Egghead, Office Depot, OfficeMax, Staples, and other fine retailers. In addition, Franklin Quest offers the Franklin Electronic DayPlanner, which incorporates the PalmPilot with Ascend '97 software, and is available at Franklin Quest retail outlets and directly from Franklin Quest.

U.S. Robotics is one of the world's leading suppliers of products and systems that provide access to information. The company designs, manufactures, markets and supports remote access servers, LAN switching equipment, desktop/mobile client products and modems, telephony products, and handheld organizers. U.S. Robotics products connect computers and other equipment over analog, digital and switched cellular networks, enabling users to gain access to, manage and share data, fax and voice information. Its customers include Internet service providers, regional Bell operating companies and a wide range of other large corporations, businesses, institutions and individuals. For further product information, customers can contact U.S. Robotics at 800-881-7256 or visit the PalmPilot web site at http://www.usr.com/palm.

U.S. Robotics, the U.S. Robotics logo, Palm Computing and Graffiti are registered trademarks of U.S. Robotics, and HotSync, PalmPilot, the Palm OS, and the PalmPilot logo are trademarks of U.S. Robotics and its subsidiaries. All other brands and product names are trademarks or registered trademarks of their respective holders.

Members of the press may contact:

Robson Grieve
A&R Partners
(415) 363-0982, ext. 221
robson_grieve@arpartners.com