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Jean-Louis Gassée Column

Overview Be Incorporated, founded in 1990 by Jean-Louis Gassée, is a software company focused on delivering an operating system designed for Internet appliances that deliver information, entertainment and rich Internet experiences to consumers. With a team of industry-leading engineers and business executives in the United States, Europe and Japan, the company is dedicated to eliminating the limitations of existing computer architectures and delivering a new level of price/performance for information and entertainment appliances. Be's headquarters are in Menlo Park, CA, with offices in Paris and Tokyo. Be's product for the appliance market is BeIA (formerly code-named "Stinger"), a turn-key software platform solution for appliances that deliver information, entertainment and interactivity over the web. Based on the Be Operating System (BeOS), BeIA is fully customizable, offers a full-featured browser and supports popular streaming audio and video standards. BeIA provides users with an easy-to-use high performance environment on low cost devices and is designed to facilitate the integration of new technologies as they appear in the future. BeIA is architected to address the user-specific requirements of information and entertainment appliance manufacturers. The modular nature of BeIA enables vendors to create customized solutions and to incorporate only those features of our operating system that are required for a particular device, allowing them to match functionality and market requirements with cost. Using BeIA, vendors can develop products and services tailored to specific users or markets without compromising the quality, stability and performance of digital media applications delivered to the user. For example, the modular nature of BeIA enables vendors to easily build their own custom design and branding into the user interface or "look and feel" of the device. Behind this custom look, the vendors can still use all of the web, audio, and video capabilities included in BeIA. This means that an Internet service provider (ISP) or computer manufacturer can deploy their own brand of devices to both gain new customers and differentiate their product by simply customizing the interface and functionality offered by BeIA. As a second example, the database-like file system native to BeIA allows vendors to create custom filetypes with custom attributes, and to then search on files matching these attributes just as one would search through a commercial database. Custom applications such as those commonly used in engineering, mechanical or scientific fields would also work well on an inexpensive information appliance. Engine analysis, astronomical research, chemical composition modeling, and other scientific/mechanical applications are all good candidates for BeIA-backed appliances. The combination of an efficient, new operating system designed for fast performance and rich digital media applications make BeIA an ideal solution for devices used to access the Internet. As of this writing, nearly 62 million people use the Internet in the United States alone. And yet, a recent Cyber Dialogue survey revealed that a significant portion of the people who are not yet online are interested in some form of access but, for various reasons including economics and convenience, not via a generic personal computer. Envision a lightweight, small in size, inexpensive computer running a reliable operating system, focused on ease-of-use, that turns on instantly, and with the complexity normally associated with computing completely hidden from the user. Because millions of users purchase computers just to "get the Internet," such a device would represent an ideal solution for potential users who still haven't ventured online and an incredible opportunity for service providers to offer a complete Internet access solution. The market for Internet appliance users -- both in home and kiosk/embedded system implementations -- may end up being larger than today's entire PC user base. Jupiter Communications, in a report titled "Internet Appliances: Non-PC Access Devices Ride Internet Standards Wave" (Oct/98), expects household penetration of Internet appliances to reach 37.3 million by 2002. A Cyber Dialogue survey indicated that 81% of people intend on using the Internet for personal use, with 44% for business use, including overlaps in both areas. At the same time, the inexorable march toward miniaturization of PC components continues unabated, driven forward by the notebook market. IBM is producing hard drives the size of postage stamps, and fully functional laptop computers weighing less than three pounds are becoming popular. By 2005, market research firm Strategy Analytics estimates that the information appliance segment, excluding Web-enabled cell phones and handheld computing devices, could total $5.6 billion in the United States alone. Accordingly, Jupiter predicts that appliances with PC-like fuctionality (e.g., Web and e-mail access stations, video and sound displays, etc.) will derive the greatest benefit by deploying on top of "horizontal" operating systems (such as BeIA). Jupiter expects the market for portable appliance devices featuring Internect access to grow to 25.9 million units by the end of 2002. "The post-PC revolution of Internet appliances has started," says Jean-Louis Gassée, chairman and chief executive officer of Be. "Our customers and partners, such as Compaq, National Semiconductor, RealNetworks and Qubit, have validated our belief that Be is well positioned to play an important role in this emerging market." Strategy Be's objective is to establish BeIA as the premier software platform that enables rich media and web experiences on Internet appliances. Key elements of our strategy include the following: Establish Relationships with Leading Industry Partners We intend to establish relationships with industry-leading consumer electronic manufacturers, Internet services and content providers. Our goal is to have BeIA used on a wide range of devices and systems. By leveraging the established sales, marketing and distribution channels and brand recognition of these key industry partners, we expect to increase the installed base of BeIA and encourage the development of devices that enable rich content, capability and Internet access to consumers. Increase Awareness of BeIA Technology In order to maximize the visibility and acceptance of Be technology, the upcoming version 5 of the BeOS desktop operating system and BeIA development environment will be available for personal use at no charge beginning later in the first quarter of 2000. At that time, individuals who register with Be at http://free.be.com/ will be able to download BeOS 5 for free. Be also intends to work with publishers and other partners to make commercial versions of BeOS 5 available through retail channels. Be Incorporated Forward-Looking Statements The statements contained in this document that are not historical facts are "forward-looking statements" including without limitation statements regarding the existing and future markets for Internet appliances, future availability and performance of BeOS, plans for product and reference platform development and release, and third party devices and applications, including Internet appliances, market penetration and market acceptance of BeIA in the Internet appliance market, and the benefit of BeIA to OEM and Internet appliance manufacturers. Actual events or results may differ materially as a result of risks facing Be Incorporated or actual results differing from the assumptions underlying such statements. Such risks and assumptions include, but are not limited to, risks and uncertainties related to the market acceptance of Internet appliances, product development, the competition and market acceptance of BeIA for the Internet appliances market, and our ability to meet OEM requirements and establish strategic relationships with OEMs. All forward-looking statements are expressly qualified in their entirety by the "Risk Factors" and other cautionary statements included in Be Incorporated's prospectus filed pursuant to Rule 424(b) of the Securities Act of 1933 on July 20, 1999 (Commission File No. 333-77855), and other public filings with the Securities and Exchange Commission.

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