Be Incorporated Reports First Quarter Results

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Be, Incorporated
Guillaume Perrotin, Corporate Controller

Be Incorporated Reports First Quarter Results

MENLO PARK, Calif.-April 19, 2000-Be Incorporated (Nasdaq: BEOS) today reported financial results for the quarter ended March 31, 2000.

Net revenues for the first quarter of 2000 were $254,000. Excluding non-cash expenses associated with the amortization of deferred compensation and preferred stock accretion, the Company reported a net loss for the first quarter of $5.0 million, or $0.14 per share, as compared to a net loss of $4.2 million, or $1.08 per share, for the same period in 1999, and a net loss of $4.9 million, or $0.14 per share, in the fourth quarter of 1999.

Including non-cash expenses associated with the amortization of deferred compensation and preferred stock accretion, net loss for the first quarter of 2000 was $6.0 million, or $0.17 per share, compared to $6.0 million, or $1.54 per share, for the same period in 1999 and $6.2 million, or $0.18 per share, for the fourth quarter of 1999.

“Although we show a decrease in net revenues as compared to the first quarter of 1999, this decrease was expected and is attributable to our decision to make the desktop version of our operating system available for free download, as we reported in our January 18th press release,” commented Jean-Louis Gassée, president and chief executive officer. “To date, all of our revenues have been derived from BeOS, with future revenues to be derived primarily from BeIA, our software platform for Internet appliances.”

“Our intent in making a downloadable version of BeOS available for free was to promote and increase the visibility of our technology and obtain valuable market feedback while aggressively pursuing Internet appliance opportunities,” continued Mr. Gassée. “The results of this effort so far, have exceeded our expectations.”

Within a week of the release of BeOS 5 Personal Edition, a record breaking 550,000 downloads were reported, and as of yesterday that total had increased to more than 870,000. These figures include all downloads from Be’s web site, as well as from 18 reporting download partners. Be estimates that at least 39 other download sites have not yet reported. Earlier this week, Be’s publishing partner for the Americas’ began shipping BeOS 5 Pro Edition into retail channels. Be expects its publishing partners in Europe and Asia to begin shipments in their territories within the next quarter.

“Since announcing our focus on Internet appliances early in the first quarter, and formally launching BeIA, our software platform for Internet appliances, we have made significant progress with appliance partners such as Compaq and National Semiconductor,” commented Mr. Gassée. “In addition, we have announced significant new partnerships this first quarter, including strategic Internet appliance relationships with Intel Corporation, First International Computer, Inc. and Proxim, Inc.”

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Forward Looking Statements

The number of free downloads of BeOS 5 Personal Edition stated is based on numbers reported to Be from the Website managers handling such downloads, and may not accurately reflect the actual number of copies of BeOS downloaded, nor are such numbers intended to imply that every download will result in the actual use and adoption of BeOS by the person or entity downloading the copy. Other statements contained in this Press Release that are not historical facts are “forward-looking statements” including without limitation statements regarding the demand for, future market penetration and market acceptance of BeIA and BeOS, the shipment dates of Be’s products, and the future operating results of Be Incorporated. 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 related to competition, market acceptance and market penetration of Be’s products, ability to establish and maintain strategic relationships, the benefit of Be’s products to OEM and Internet appliance manufacturers. the continued availability of third party BeOS applications and drivers, and the ability to establish and maintain strategic publishing relationships. All forward-looking statements are expressly qualified in their entirety by the “Risk Factors” and other cautionary statements included in Be Incorporated’s Annual Report on Form 10-K for the year ended December 31, 1999, and other public filings with the Securities and Exchange Commission.

About Be

Founded in 1990, Be Incorporated creates software platforms that enable rich media and web experiences on personal computers and Internet appliances. Be’s headquarters are in Menlo Park, California, and its European office is in Paris, France. It is publicly traded on the Nasdaq National Market under the symbol BEOS. Be can be found on the web at

                              BE INCORPORATED
               (in thousands, except per share amounts)
                               Three Months Ended      
                                   March 31,        
                                 2000      1999       

 Net revenues                  $   254   $   309    
 Cost of revenues                  293        85      
                               -------   -------    
 Gross profit (loss)               (39)      224      

 Operating expenses:
  Research and development       2,148     1,887      
  Sales and marketing            2,171     1,882      
  General and administrative       950       737      
  Amortization of deferred
   stock compensation            1,033     1,665      
                                -------    ------    
 Total operating expenses        6,302     6,171     
                                -------    ------    
 Loss from operations           (6,341)   (5,947)   

 Other income, net                 341       101        
                                -------    ------    
 Net Loss                      $(6,000)  $(5,846)  
                                =======   =======    
 Net loss attributable to 
 common stockholders           $(6,000)  $(5,979)  
                               =======    =======    
 Basic and diluted net
 loss per share                $ (0.17)  $ (1.54)   
                               =======    =======     
 Shares used to compute
  basic and diluted net
  loss per share                34,999     3,881     
                               ========   =======    
 Net loss per share excluding
  amortization of deferred
  compensation and preferred
  stock accretion             $ (0.14)   $ (1.08)   
                               =======    =======    

                          BE INCORPORATED
                           (in thousands)

                                        March 31,     December 31,
ASSETS                                    2000            1999
                                       (Unaudited)      (Audited)
                                          ----             ----
Current assets:
 Cash, cash equivalents
    and short term investments         $ 26,736         $ 29,129
 Accounts receivable, net                    72              167
 Prepaid expenses and other                 624              730
                                      -------------    -------------
Total current assets                     27,432           30,036

Property and equipment, net                 544              562
Other assets                              1,549            1,722
                                      -------------    -------------

Total Assets                           $ 29,525         $ 32,310
                                      =============    =============

Current Liabilities:
 Accounts payable                       $   515          $   860
 Accrued expenses                         1,306            1,550
 Technology license obligations             696              777
 Deferred revenue                            80               99
                                       -------------    -------------
Total current liabilities                 2,597            3,286        
Technology license obligations              491              597
Total stockholders' equity               26,437	          28,427
                                       -------------    -------------

Total Liabilities and 
 Stockholders' Equity                  $ 29,525         $ 32,310
                                      =============    =============