HOMENEWSPress Release Subject COWON records US $99.5 million in sales and US$6.6 million in ordinary income in 2005 Date 2006.02.08 COWON SYSTEMS Inc. (CEO Park Nam-Gyu, www.cowon.com) reported that the company earned US $99.5 million in sales and US $6.6 million in ordinary income for 2005, posting the highest figure for the company since its foundation. In particular, sales for the forth quarter last year reached a record high of US $30.8 million. The company said that these results were achieved thanks to high-end products such as iAUDIO X5, iAUDIO U3, and COWON A2 released last year, one after the other, as well as diverse and efficient global marketing activities for higher quality and brand power. These results are more impressive because the company had to deal with low-price marketing strategies of large corporations including Apple. COWON's strengths include a competitive edge in technological expertise that has been built over years as a digital multimedia market player as well as its outstanding management capabilities that helped the company to grow even in difficult market conditions. With such strengths, the company was able to maintain sustained growth while competing with large corporations and world renowned brands such as Apple. Cowon has maintained profitable growth for the last 10 consecutive years, with its capital plus retained earnings now amounting to approximately US $30 million. The company is targeting US $13.8 million in total sales including US $12.5 million for the digital device sector and US $1.3 million for the digital contents sector, US $1.55 million for operating profit, and US $1.1 million for net profit for the year 2006. In order to achieve higher profit, the company has drawn up plans to target both existing and emerging markets with a high-end product lineup to distribute fixed costs in more units for an economy of scale. While being consistent with its high-end, high-margin marketing strategy with feature-rich, new concept models such as iAUDIO 6, the world's first 0.85-inch HDD MP3 player equipped with color video, COWON is also contemplating branching out into the PMP industry to introduce PMPs that double as terrestrial DMB devices and navigators in the communication industry, ranging from digital video and WiBro to HSDPA. Furthermore, they plan to develop wireless internet business in overseas markets while strengthening their competitive advantage there. Their content service business for devices is also in the planning stage for more diversity. CEO Park Nam-Gyu of Cowon Systems said, 'We are progressing as we have planned in our roadmap for 'Digital Devices and Contents'. We will penetrate overseas markets more actively by building more overseas branches and reinforcing local marketing in order to promote COWON and iAUDIO as internationally renowned brands.'