Press Release

BSQUARE's SDIO Now! Program Adds HP and Microsoft to Growing List of Supporters
BELLEVUE, Wash., Jun 25, 2002 (BUSINESS WIRE) --

Increased Membership and Industry Enthusiasm Represents Growing Acceptance of SD (Secure Digital) Technology on Windows Embedded-Based Devices

BSQUARE Corporation (Nasdaq:BSQR) today announced the addition of HP as a member of the company's SDIO Now! Program.

The company also announced current SDIO Now! member, Microsoft, has signed a source license agreement enabling them to include BSQUARE's SDIO technology into future versions of their operating systems. BSQUARE's SDIO Now! Program has received strong industry recognition since it was announced in early March. The program was designed to help chipset vendors, portable device, card host controller, and peripheral manufacturers support the increasingly popular SD (Secure Digital) standard and SDIO products on Microsoft Windows Embedded-based smart devices. The addition of HP and endorsement by Microsoft signals widespread industry adoption of the SDIO Now! Program.

"Device manufacturers building Windows Powered smart devices want to take advantage of the best storage and peripheral IO expansion capabilities available," said Todd Warren, general manager for the Embedded and Appliance Platforms Group at Microsoft. "By participating in BSQUARE's SDIO Now! Program, Microsoft and BSQUARE are making it very quick and easy for developers to include support for SDIO in their Windows Powered devices."

SD is a standard for data storage and peripheral I/O expansion for small form-factor devices such as MP3 players, digital cameras, handheld computers, and mobile phones. As this standard continues to gain broad industry acceptance, vendors planning to implement SD and SDIO technology on Windows Embedded-based smart devices and peripherals are faced with critical development and support issues.

"We are encouraged by the strong momentum surrounding SDIO Now! as industry leaders such as Microsoft and HP look to BSQUARE to provide a comprehensive solution for implementing SDIO technology on the Windows Embedded platform," said William Baxter, president and CEO of BSQUARE. "As SDIO products continue to gain market acceptance, SDIO Now! offers vendors an immediate means of supporting SDIO technology on the greatest number of Windows Embedded-based products and peripherals at the lowest possible cost."

"We are continuing to drive the development of leading-edge technologies for our customers," said Cindy Box, director of marketing for HP Smart Handhelds. "SDIO Now! enables us to provide support for a wide range of new accessories providing even greater expansion capabilities for our iPAQ Pocket PC products."

    BSQUARE SDIO Now! Program
SDIO Now! provides a coordinated approach to delivering SDIO system software among portable device OEMs, chipset and semiconductor vendors, and peripheral manufacturers. With a standard driver architecture and APIs, peripheral vendors can feel confident that their products will be compatible with various devices regardless of the choice of SD host controller or platform architecture.

The standard architectures for adding SD and SDIO card bus functionality, allow device OEMs to choose from a variety of host controller solutions and rapidly add SDIO card support without having to develop the complex infrastructure for supporting commercially available peripherals. Furthermore, a semiconductor vendor can provide the necessary software module to enable the SD card host functionality with little or no development from the OEM.

Current members now include AMD, ATI Technologies, HP, Matsushita Electric Industrial (Panasonic), Microsoft Corporation, MicroTune, Socket Communications and Tokyo Electron Device.

Three classes of membership are offered: Device OEM Membership includes bus controller IP and peripheral driver development tools; Peripheral Manufacturer Membership includes peripheral driver development tools, and Semiconductor Vendor Membership includes BSQUARE development of host controller drivers and reference design enabling software.

    About BSQUARE
BSQUARE accelerates the development, deployment, and management of next generation smart devices and applications. The company's product and service suite includes Device Development Solutions, Wireless Solutions and Location/Navigation Solutions. For nearly a decade, BSQUARE has provided more than 150 world-class manufacturers, integrators and service providers the necessary building blocks to design, develop and test innovative products quickly and cost effectively. BSQUARE offers its customers the deepest expertise in the latest hardware and software platforms and systems, providing critical engineering services that have resulted in the successful launch of hundreds of new products and applications. BSQUARE's new wireless product and service solutions help companies expand into new data-oriented mobile markets, increasing client revenue and reducing risk and support costs associated with product development. For more information, visit BSQUARE at or call 888/820-4500.

BSQUARE is a registered trademark of BSQUARE Corporation. All other product and company names herein may be trademarks of their respective owners.

This release may contain forward-looking statements relating to our sales that are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words "believe," "expect," "intend," "anticipate," variations of such words, and similar expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Factors that could affect BSQUARE's actual results include adverse changes in BSQUARE's relationship with Microsoft, a decline in the market for Windows Embedded smart devices or the failure of such market to develop as anticipated, risks associated with international business, a change in strategy relating to indirect channels, delays or announcements of delays by Microsoft of Windows Embedded product releases, risks associated with fixed-fee contracts, competition and intellectual property risks. A more detailed description of certain factors that could affect actual results include, but are not limited to, those discussed in BSQUARE's Quarterly Report on Form 10-Q, in the section entitled "Certain Factors That May Affect Future Results." Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. BSQUARE undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.

CONTACT:          BSQUARE Public Relations
                  Laura Truex, 415/602-3561 (mobile)
                  or 425/519-5900 (corporate)

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