The News

Esmertec decides to postpone its IPO

05/07/2005

Duebendorf-Zurich, Switzerland – July 5, 2005 – Esmertec™, a leading global, independent developer of software solutions for mobile handsets and embedded devices, announced today that it is postponing its planned IPO.

As a result of the marketing effort conducted by management during the roadshow, investors exhibited very strong interest in Esmertec’s IPO.  Nevertheless, following two press releases - one issued on July 1st about an alleged patent situation and the second on July 3rd regarding a customer placed into administration - the company believes that the conditions for the pricing and trading of the IPO are currently not optimal.

As a result, Esmertec and its Board of Directors, after consultation with UBS Investment Bank and Deutsche Bank as Joint Bookrunners, have decided to postpone the IPO.

The board, the management and the investors of Esmertec are confident about the current development and future prospects of the company based on Esmertec’s history and significant demonstrated growth.

About Esmertec
Esmertec is a leading provider of software solutions for mobile phones and embedded devices. Our high-performance solutions are delivered to chipset and embedded devices manufacturers in mobile and landline telecommunication, home-multimedia, machine-to-machine and consumer electronics markets. Engineered for smallness, Esmertec's wireless Java™ (Java ME) solutions, mobile applications and components, and object-oriented software platform (OSVM™) are designed to extract maximum performance from hardware environments. Founded in 1999, Esmertec is a global company headquartered in Zurich, with engineering, sales and customer support operations in Switzerland, China, Denmark, France, Japan, Korea, Singapore, Taiwan, the UK and the USA.

Contact
Leng Stricker-Wong
Phone +41 1 823 8954
lstricker@esmertec.com

This press release is not an offer of securities for sale in the United States.  No securities may be offered or sold in the United States absent registration or an exemption from registration, and any public offer of securities to be made in the United States will be made by means of a prospectus that may be obtained from Esmertec AG.  Such prospectus will contain detailed information about Esmertec and its management, as well as its financial statements. This press release is not being made and may not be distributed or sent into Australia, Canada or Japan.

This document is only directed at persons who: (i) are outside the United Kingdom; or (ii) have professional experience in matters relating to investments; or (iii) are persons falling within Article 49(2)(a) to (d) (“high net worth companies, unincorporated associations etc”) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 (all such persons being together referred to as “relevant persons”).  This press release must not be acted on or relied on by persons who are not relevant persons.  Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons.

The announcement is not an offer of securities under Swiss Law. It is not a listing prospectus according to art. 652a and/or art. 1156 Swiss Code of Obligations or art. 32 ff. Swiss Listing Rules and is not a listing notice according to art. 45 ff. Swiss Listing Rules.

"Safe Harbor" Statement under the U.S. Private Securities Litigation Reform Act of 1995. The matters discussed in this press release include forward-looking statements that are subject to risks and uncertainties including, but not limited to the impact of changes in product demand, pricing and competition, including increased competition from existing or new competitors or new technologies and the risk that our software may contain defects; product development risks, including our ability to develop enhancements to our software or to develop new commercially viable technologies and our ability to protect our intellectual property rights and to defend them against infringement; a potential reversal of the trend among mobile handset manufacturers to outsource the development of Java solutions; the loss of key customers; managements ability to develop and execute a successful strategy, including partnerships, acquisitions, divestitures and ability to manage growth; adverse regulatory, legislative and judicial developments; our failure to retain key personnel; the adverse impact of currency exposures; and the impact of worldwide economic, political and business conditions.

Esmertec is a trademark of Esmertec AG. Java is a trademarks of Sun Microsystems, Inc. Other company, product and service names may be trademarks of their respective owners.