PROFILE

The Smart Handheld Devices division of Paragon Software was formed in late 1995. At that time the division consisted of 1 person doing an outsourced Newton Message Pad project for a third party. After the project was completed the person continued to work on a task of Russian language support in Newton OS. The successful accomplishment of the full Russian localization of Newton OS in 1996 discovered a new niche on the handheld software market - RAM based localization of smart handheld devices, where Paragon Software established itself as a proved leader over the last years.

Further advances in handheld software business of Smart Handheld Devices division were made from localization basis. On-line handwriting recognition project PenReader was started to provide localized pen input on Newton Message Pad. In year 2000 new product line of handheld dictionaries was started.

Along with core technologies like localization and handwriting recognition, handheld software utilities has always been one of our secondary tasks. In year 2000 a Symbian utilities focused team of division's developers was transformed into EPOCWARE - an independent business unit of Paragon Software Smart Handheld Devices division. Nearest plans of Paragon Software include allocation of considerable development and marketing resources for creation and laucnh of new utilites product lines for several handheld platforms.

Paragon Software SHDD current composit market shares, generating most of company's income, can be roughly estimated as follows:

• handheld localization for EMEA and Israel market - dominating (over 75%)
• handheld localization for non-EMEA markets (Asia, Arabic countries) - minor (less than 10%)
• multilanguage on-line handwriting recognition for languages other than English - dominating (over 90%)
• handheld dictionaries - start-up (less than 5% but rapidly growing)
• utilities for Symbian developed by EPOCWARE - strong (over 10%)
• utilities for platforms other than Symbian - minor (less than 1%)

Company focuses its efforts on most emerging segments of handheld software market. Company's turnover grows faster than handheld market* . Recent 2 years were completed with more than doubled turnovers. Paragon Software is a privately owned company, built and operating without external investments. Further information about Paragon Software can be found at www.paragon-software.com.

* based on comparison of IDC SHD annual market reports and company's annual turnover statement.