This message is to inform you of some changes in Microsoft's plans
regarding handheld systems. Based on feedback from customers, we are going
to take some time to listen, gather information and re-calibrate our
strategy to deliver the best 'Windows Companion' possible.

A number of factors have convinced us now is a good time to re-calibrate
our product strategy; these include cancellation of the VLSI Polar chipset
and all machines based on that chipset, inability of lead OEMs to hit
desired price-points with WinPad based machines, OEM concern over existing
WinPad hardware requirements and schedule delays, and the timeframe when
the first WinPad based machines are planned to enter the market. While
there have been a lot of changes, MICROSOFT REMAINS COMMITTED TO THE
WINDOWS COMPANION CONCEPT. In fact, to leverage a closer connection to the
Windows Desktop, the WinPad group has now moved into the Personal Systems
Division.

We value your support for Microsoft efforts in the handheld area and look
forward to opportunity of working together with you on handheld technology
in the future.