China High Definition Television (HDTV) Subscribers Pass 2 Million Mark, Driving Upside for Cogo

SHENZHEN, China, July 9 /PRNewswire-FirstCall/ -- Cogo Group, Inc. (Nasdaq: COGO), a leading embedded solutions and software provider for the technology and industrial sectors in China, today announced that upgrades to High Definition Television ("HDTV") in China are accelerating with total subscribers reaching over 2 million.  A combination of strong consumer demand and aggressive roll-out schedules are helping to fuel this growth.  

Cogo previously revealed its design wins for HD solutions, which it will provide to multiple top-tier set-top box ("STB") manufacturers.  The company had already begun to record material revenue by the end of 2009. Currently, Cogo is working with over 20 manufacturers of HDTV set top boxes, and the company continues to pursue new customers. Over the last few years, Cogo has worked closely with its key HDTV component supplier to develop customized solutions.  Management believes its partner, a global leader in semiconductors, has gained material share in HDTV set-top boxes versus other standard digital TV solutions in China.    

Based on current projections, HDTV subscribers are expected to reach 6 million by the end of 2010.  Cogo expects that over time the majority of China's over 1,000 city-based cable operators will ultimately roll out HDTV.  Given the country's increase in cable subscribers and base of 60 million digital subscribers, Cogo believes HDTV in China will reach over 30 million by the end of 2012.  The company continues to believe that the preferred method for upgrade will include the purchase of a new set-top box.  

"In our press release dated June 3, 2010, we indicated that Cogo was experiencing better than expected second quarter results in part driven by consumer demand for HDTV and its subsequent increase in subscribers," commented Jeffrey Kang, CEO of Cogo.  "We are benefiting from a continued strong macro backdrop in China across both the industrials and consumer segments.  This, combined with a series of new revenue streams, will continue to drive improvements across all our businesses throughout the second half of 2010."

About Cogo Group, Inc.:

Cogo Group, Inc. (Nasdaq: COGO) is a leading embedded solutions and software provider for the technology and industrial sectors in China. The Company believes it acts as a proxy to China's technology industry as it works with virtually all the major ODMs and OEMs in China. Cogo leverages these relationships and combines their IP to create designs that Cogo then sells to electronic manufacturers. These designs allow manufacturers to reduce their time to market for new products and ultimately increase sales. Cogo focuses on the telecommunications equipment, digital media and industrial applications end-markets for their customized design modules while also offering business and engineering services to their large telecommunications equipment vendor customers. Over the last fifteen years, Cogo has grown its customer list to include nearly 1,500 manufacturers across the telecommunications equipment, digital media and industrial applications markets, covering both multinational Chinese subsidiaries and Chinese domestic companies.

Safe Harbor Statement:

This press release includes certain statements that are not descriptions of historical facts, but are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These forward-looking statements may include statements about our proposed discussions related to our business or growth strategy such as growth in HDTV business, which are subject to change. Such information is based upon expectations of our management that were reasonable when made, but may prove to be incorrect. All such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. For further descriptions of other risks and uncertainties, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 10-K, and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at www.sec.gov.

SOURCE Cogo Group, Inc.