Anoto AB – new video technology contract substantially boosts future revenue

Anoto's business segment for video technology and ASIC development has signed a new contract with a global manufacturer of mobile phone platforms. In addition to its core areas of Pentop computing and Digital pen and paper solutions for forms processing, Anoto supplies camera and video technology for other uses. The Anoto Technology application area, which is responsible for the development and sales of video technology, has signed a number of new agreements over the past year. Anoto's ASIC (Argus) is used in camera products, and Anoto's MPEG-4/H.263 video codec IP blocks have been used previously in a number of mobile phone platforms. The company has now signed an additional contract for a new mobile phone platform. Anoto's product range includes high-quality, cost-effective video codec IP blocks for the MPEG-4, H.263 and H.264 standards in resolutions up to SDTV. The products are hardware IP blocks for integration in the customer's ASIC. Anoto Technology's revenue of approximately SEK 12 million in 2005 came exclusively from sales of Argus ASIC. The company expects to begin receiving the first royalties from sales of IP blocks for mobile phones in late 2006. Because the gross margin on these royalties is 100%, Anoto Technology's total gross margin will improve. "The new video technology contract reconfirms that our core technology and development staff are both first-class," says Anoto Group CEO Örjan Johansson. "Given the potential of the mobile phones that will contain Anoto technology, we are looking forward to substantially higher sales and a 2007 gross profit at Anoto Technology that is many times the current level, and 2008 is expected to continue to grow substantially." For more information, please phone: Örjan Johansson, CEO Anoto Group AB +46 733 45 12 08 Mats Blom, CFO Anoto Group AB +46 733 45 12 48