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BSQUARE Dramatically Simplifies Device Driver Development with Release of WinDK for Windows CE

Device Driver Wizard a Breakthrough in Automatic Code Generation

BELLEVUE, WA, August 20, 2001 - Redefining the way developers create hardware drivers for the Microsoft Windows CE 3.0 operating system, BSQUARE® Corporation (Nasdaq:BSQR) today announced the immediate availability of WinDK™ for Windows CE (WinDK-CE). WinDK-CE addresses the pressing needs of software developers for tools that will make them more productive as they build Windows CE 3.0-based devices for automotive, home automation, industrial automation, medical equipment, and other embedded computing markets.

BSQUARE's WinDK-CE is a complete tool set for creating and supporting robust and full-featured device drivers for Windows CE 3.0-based platforms. WinDK-CE provides all the device driver development tools and software components to create device drivers that can be accessed by applications using the standard Win32 API (application programming interface).

WinDK-CE features a Device Driver Wizard that takes developer inputs and creates a skeleton of the device driver code that provides a solid starting point for adding the hardware specific features. The wizard creates both source and build files, and adds hundreds of commented source code to lay down the foundation of the device driver. Initial results from beta customers found that WinDK-CE cut development time by four to six months, even for developers who have little experience in creating drivers.

"WinDK-CE's capabilities are the result of BSQUARE's unique ability to marry automatic code-writing technology with the company's extensive experience in developing Windows CE device drivers," said Lew Larson, vice president of marketing for BSQUARE Corporation. "Since 1993, BSQUARE has developed drivers for a wide variety of hardware devices. Now we've -more- BSQUARE Dramatically Simplifies Device Driver Development; page 2

taken all the rules and knowledge that we've learned and packaged it into an effortless wizard that any developer can use to save time and money."

WinDK-CE is a new product based on BSQUARE's proven WinDK driver development toolkit. The WinDK family of products also includes versions for Windows 98, Windows 2000 and Windows NT desktop operating systems as well as technology extensions such as Bluetooth, USB and Time Critical Processing. The entire suite of tools works together, enabling developers to leverage their investments in WinDK product training across multiple platforms.

"We rely heavily on BSQUARE's WinDK tools to help us develop high-performance device drivers rapidly and with reduced schedule risk." said Timothy A. Johns, President, Driver Development Corporation. "The Device Driver Wizard in WinDK - CE delivers serious productivity gains, saving our programmers weeks of coding time. The wizard, the developed and tested library code, and the extensive samples enable programmers to concentrate on fulfilling the customer's requirements rather than implementing large amounts of tedious code."

WinDK - CE fully integrates into Microsoft's Platform Builder 3.0 Integrated Development Environment, a comprehensive toolkit for Windows CE 3.0 developers. This means developers can generate their driver projects and develop/debug their drivers all within the easy to use Platform Builder IDE

"Fast time to market is of utmost importance to embedded developers, and the ability to leverage the Windows CE expertise from companies such as BSQUARE can help in reducing product development time," said Keith White, senior director of marketing, Embedded and Appliance Platforms Group at Microsoft Corp. "BSQUARE's new WinDK - CE will help enable embedded developers to even more quickly bring to market their next-generation smart mobile Windows Powered devices."

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WinDK for Windows CE BSQUARE's WinDK for Windows CE enables developers to build robust and high performance device drivers for Windows CE 3.0 and higher. WinDK-CE is a driver model that has its roots in the Windows NT kernel-mode driver model. It provides a set of well tested and proven Application Program Interfaces (APIs) that have been deployed on a wide range of peripherals, platforms, and devices.

WinDK-CE can quickly bring up a device driver under Windows CE when time-to-prototype or time-to-market is at a premium. By eliminating many of the complex and time-consuming tasks of developing device drivers, WinDK-CE's driver-APIs allow developers to concentrate on their hardware functionality, rather than the underlying operating system driver model itself.

Availability and Pricing WinDK for Windows CE is available immediately. In North America, WinDK for Windows CE is $1,995 and WinDK for Windows CE Subscription is $550. Outside North America, WinDK for Windows CE is $2,125 and WinDK for Windows CE Subscription is $600. Customers can also purchase Microsoft's Platform Builder 3.0 directly from BSQUARE.

North American customers can order WinDK for Windows CE and try it risk-free for 30 days. If unsatisfied with WinDK for Windows CE, customers can contact the sales department for a return authorization. Contact BSQUARE's sales department for any additional pricing and purchasing information at 888-820-4500 or sales@bsquare.com.

About BSQUARE BSQUARE Corporation (Nasdaq: BSQR) is a global leader in providing solutions for smart devices in consumer, enterprise, industrial and automotive markets. As a leading partner for Microsoft, BSQUARE empowers the creation, connection, and management of Windows Embedded powered smart devices through software, hardware, and service solutions. BSQUARE has an extensive product portfolio of software development and quality assurance tools, device and device management software and complete end-to-end managed device -more- BSQUARE Dramatically Simplifies Device Driver Development; page 3

solutions. BSQUARE provides critical engineering services including device development, quality assurance, and system integration as well as services for managing client devices deployed into the market. For more information, visit BSQUARE at http://www.BSQUARE.com  or call 888-820-4500.

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BSQUARE is a registered trademark of BSQUARE Corporation. All names, product names, and tradenames are trademarks or registered trademarks of their respective holders. Pricing is subject to change without notice.

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 CE-based intelligent computing devices or the failure of such market to develop as anticipated, delays or announcements of delays by Microsoft of Windows CE 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.

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