Aether Takes Additional Action to Reduce Costs And Improve Path to Profitability; Product Development Efforts Center On ROI-Based Vertical Market Solutions.

Business Editors/Hi-Tech Writers

OWINGS MILLS, Md.--(BUSINESS WIRE)--March 4, 2002

Aether Fusion Core Platform Completes Acceptance Testing

Aether Systems, Inc. (Nasdaq:AETH), a leading provider of wireless data products and services, today announced that the company has taken action to continue to reduce operating expenses while centering resources on core revenue-generating opportunities.

As part of the company's ongoing expense reduction efforts and focus on a path to profitability, Aether will decrease total employment by approximately 25 percent, or approximately 225 positions. Additionally, Aether will further reduce other expenses, consolidate facilities and further streamline Sila Communications, its European venture.

Aether will take a restructuring charge of approximately $11 million in the first quarter of 2002 relating to these actions.

Aether will focus resources on core and near-term revenue opportunities -- areas where the company has either developed a leadership position or has recognized a clear market opportunity, while reducing development efforts on initiatives with a longer path to revenue.

The recent completion of the Aether Fusion core platform will allow Aether to dedicate its development and support resources to key strategic initiatives.

Aether will continue its strategic focus on four significant market opportunities:

-- Enterprise Solutions - Aether is focused on providing integrated wireless
data solutions to enterprises with product development emphasis on field
service, sales force automation, distribution and delivery management, and mail
and messaging access.

-- Transportation & Logistics - Aether is a recognized leader in supplying
innovative, communications and asset tracking applications to a growing base of
more than 200 customers (representing more than 20,000 systems) including
Sitton Motor Lines, JDC Logistics, Hahn Transportation, Office Depot, Staples,
and GE Supply.

-- Mobile Government - Aether is the leading provider of wireless public safety
solutions, with customers spanning more than 2,000 public safety agencies. With
proven products and solutions and significant market share, Aether is uniquely
positioned to leverage its recently announced Homeland Security initiatives.

-- Small Business Solutions - Aether is leveraging its relationship with AOL to
provide empowering wireless solutions to companies in industries including real
estate, automotive and contractors.

"Our collective energies will be focused on customer-driven solutions to drive profitable revenue," said Chairman and CEO Dave Oros. "We remain committed to our path to profitability and will not yield from this goal. At the same time, it is never easy to let go of dedicated and talented employees and we regret that the economic environment along with slower than anticipated adoption of some wireless data solutions has forced us to make these difficult decisions."

Oros continued, "New product offerings will be driven by customer requirements and return on investment. Specifically, this year we will deliver productized field service applications to empower remote workforces, building upon our experiences delivering solutions for leaders including Office Depot and Sun Microsystems. Aether Fusion, our core software platform, recently completed acceptance testing and it, along with our world-class network operations centers, will continue to be the cornerstone of all new product offerings."

Guidance for 2002

Based on Aether's ongoing cost-cutting initiatives, management expects operating expenses to continue to decrease throughout the year. In Q1 of this year, operating expenses are expected to be in the low $40s million range. In Q2, Aether expects operating expenses in the mid-$30s million range.

Operating expenses are expected to continue to decrease in the second half of the year, with a goal of reaching the mid-to-upper $20s million range in Q4 2002.

Aether's cash position as of the end of Q4 2001 was $530 million.

About Aether Systems

Aether Systems helps enterprise customers improve efficiency and profitability by providing the services, software and support necessary to extend existing and future applications from the desktop to any wireless device.

Through Aether Fusion(TM), Aether's wireless enabling technology foundation, Aether develops, deploys and manages wireless solutions built on industry standard technology and backed by Aether's expertise in wireless hosting, software and services. Aether provides the worlds of business and government with a single source for reliable, scalable and cost effective wireless solutions.

For more information, please visit www.aethersystems.com.

This press release contains statements based on a preliminary review by management of financial information for the 2002 fiscal year. Actual results could differ materially for a variety of reasons and circumstances.

In addition, this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

These forward-looking statements are subject to a variety of uncertainties including whether trends indicated to date continue into the future, and whether changes in business conditions, company strategy or other factors occur.

Information about other specific factors that potentially could affect Aether's financial results, including non-cash charges, is included in Aether's filings with the Securities and Exchange Commission. Actual results could differ materially from those indicated in this release. Aether undertakes no obligation to update forward-looking statements set forth in this release.