Cogo Announces Tablet Contract Wins for the China Marketplace

Oct 13, 2010, 06:00 ET from Cogo Group, Inc.

SHENZHEN, China, Oct. 13 /PRNewswire/ -- Cogo Group, Inc. (Nasdaq: COGO), a leading embedded solutions provider for the technology and industrial sectors in China, today announced a series of design wins with key digital media customers for touch-screen tablets in China.  Cogo anticipates to add more than 20 customers pursuing this rapidly growing market in China, which is estimated to reach several million units in the domestic market in 2011.

Cogo will provide integrated, embedded solutions that include MCU (Microcontroller Unit), memory and wireless access (either 3G or WiFi) from several of its leading global semiconductor partners. Cogo's average selling price ("ASP") for these devices will be significantly higher than its ASP for high-end 3G Smartphone embedded solutions that are currently shipping.  Additionally, Cogo will offer solutions to certain tablets that provide gaming functions, including 3D gaming and motion sensor capabilities, as well as location search using GPS.

The global success of the iPad from Apple has quickly raised consumer awareness of and demand for touch-screen tablet products in China, driving dozens of digital media and consumer electronics companies there to produce tablet products priced for mass-market consumption. Many of these products will be Android or Windows-based and will have the support of a large base of application developers. Cogo estimates these devices will be priced in the range of $150-$250, depending on the amount of memory and whether the device is 3G-enabled or WiFi only.  In the same way that the iPhone from Apple has helped to drive consumer interest in Smartphones in China, Cogo expects the iPad will bolster consumer interest in tablets and this will create a whole new multimillion addressable market for the Company.

Cogo began to record small amounts of tablet revenue in the third quarter of 2010, and expects this figure to ramp materially in 2011 as the tablet market takes hold and more of its customers launch new products.  Apart from the obvious consumer appeal of these devices, Cogo believes the youth education market will help to drive significant interest in these products over time.  Additionally, Cogo believes this tablet market segment will to some extent cannibalize the existing notebook market in China.  Cogo views this development positively because Cogo does not participate in the PC or notebook markets, thus increasing the Company's confidence that tablet growth will materially increase Cogo's addressable market in the digital media space.

"We are excited about our prospects to be a part of the expected rapid growth of the tablet market in China, which bolsters our confidence in the continued strong growth of our digital media segment in 2011 and 2012," commented Jeffrey Kang, CEO of Cogo.  "We believe the tablet market will provide yet another example of the value-added solutions we provide both our customers and component supplier partners by speeding time to market, adding China specific expertise to the design process and reducing overall costs.  We continue to see a strong order pipeline and expect this to continue to drive strong growth in the back half of 2010 and into 2011."

About Cogo Group, Inc.:

Cogo Group, Inc. (Nasdaq: COGO) is a leading provider of customized module and subsystem design solutions 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.

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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 digital media and industrial application businesses, 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

SOURCE Cogo Group, Inc.