As Electronics Companies Push Home Automation, Microware Stands to Benefit.

Business Editors & Technology Writers

DES MOINES, Iowa--(BUSINESS WIRE)--April 20, 2000

Many of the world's biggest electronics manufacturers have set their sights on home automation - interconnected, smart, home-based appliances that "talk" to the Internet as well as to each other. One of the companies that stands to benefit from this trend toward the introduction of smart appliances and the underlying communications network is Microware Systems Corporation (Nasdaq:MWAR), which provides the embedded software and services needed to design and power smart appliances. This embedded intelligence is the most critical element of a networked home.

Microware's offering includes its OS-9(R) embedded real-time operating system (RTOS), software components supporting network and telecommunications protocols, development tools, and specialized consulting services used by product developers. "Microware's value is its ability to cut development time by providing developers with easy-to-use, fully developed embedded solutions that enable product designers to implant the 'smarts' in smart appliances," said Ken Kaplan, president and chief executive officer of Microware Systems.

According to Yankee Group, the number of networked homes in the U.S. will grow to 9.5 million in 2003, representing nine percent of all households. Currently, there are about 650,000 networked homes in the U.S. Even faster growth rates are predicted for Europe and Asia.

A new generation of digital home entertainment systems such as set-top boxes, digital VCRs and camcorders, high definition television (HDTV) sets, and digital cameras will be able to communicate and work together using standard networking systems such as Home Audio Video interoperability (HAVi). HAVi is designed to ensure interoperability across brands and device types. Makers of traditional home appliances such as washers, dryers, dishwashers, refrigerators, and microwave ovens are also considering connections to home networks. Connections of household infrastructure systems such as security, lighting, heating and cooling systems are a likely next step.

High speed, broadband connections to the home via cable modem or DSL technology will permit homeowners to do such new things as remotely access security and home observation systems, turn lighting off or on, get the shopping list from the refrigerator, or even start dinner cooking from their office, car, or almost anywhere else.

"Microware is well positioned for significant growth in the home market," said Larry French, vice president, digital TV for Microware. "Microware's OS-9(R) embedded software is already used in some of the most sophisticated audio-video products. Microware was a pioneer in the development of digital television set-top boxes, with hundreds of thousands of one-way and fully interactive set-top boxes already deployed in residential service by leading operators such as BellSouth, Hong Kong Telecom, and others." As domestic digital television moves forward, Microware believes its experience in overseas markets and long-term relationships with equipment manufacturers puts it in a solid position for growth from this market.

In addition to set-top boxes, Microware's embedded software is used in a wide range of consumer devices including digital audio and video systems, car navigation systems, advanced cellular phones and two-way pagers. "Microware is poised to gain market share in the area of consumer electronics. We are the only embedded RTOS provider with a complete system development approach for building products that utilize an IEEE 1394 connection, the likely winner in the race for high speed communication between home audio and video appliances," French said.

"One of Microware's great strengths is its ability to converge embedded systems and communications," Kaplan said. "The key element is connecting these digital devices and allowing them to communicate with each other and the Internet. That's where Microware's technology and expertise comes in. We offer a complete selection of off-the-shelf components needed for home device connectivity."

Java(TM) technology will likely be the common language for application software and Microware is a leading supplier of effective, reliable Java Virtual Machines for embedded systems. Microware has plans to support emerging network technologies and has strategic relationships with leading silicon and technology suppliers such as Motorola, Hitachi, Intel, JVC and Sun.

Home network servers that provide common mass storage and broadband network gateway functions will appear on the market soon. Low-cost radio frequency and infrared wireless network technology such as Bluetooth and 802.11 will play an important role by eliminating the cost of rewiring homes. Microware is developing embedded software that supports several new technologies, including Bluetooth, the protocol for connecting devices using radio waves instead of wires. Bluetooth supporters are promoting the wireless home network, where all types of devices communicate with ease.

About Microware Systems Corporation

Microware Systems Corporation (NASDAQ: MWAR) provides embedded solutions for successful products. The solutions include development tools such as integrated development environments, software components such as the OS-9(R) real-time operating system, and consulting services. Microware software is used in internet appliances, consumer electronics, wireless communication devices, industrial automation, office automation, automotive control, digital television, telecommunications, and multimedia devices, representing many of the fastest-growing areas in worldwide technology. Founded in 1977, Microware is headquartered in Des Moines, Iowa, with offices throughout the United States, Europe, and Japan. For more information, visit www.microware.com, send e-mail to [e-mail], or call 1-800-475-9000 or 515-223-8000.

Cautionary note: This press release may contain certain statements of a forward-looking nature relating to future events or future business performance. Any such statements that refer to Microware's estimated or anticipated future results, product performance or other non-historical facts are forward looking and reflect Microware's current perspective of existing trends and information. These statements involve risks and uncertainties that cannot be predicted or quantified, and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements.

Such risks and uncertainties include, among other things, the historical volatility in the Company's quarterly performance; growth of markets at which the Company's products are targeted; the Company's dependence on its strategic customers' successful deployment, marketing, and sales of new products targeted at those markets; and other factors detailed in the Company's history of past losses and filings with the Securities and Exchange Commission. These statements speak as of the date of this release, and the Company undertakes no obligation to update these statements in light of future events or otherwise.

Microware, the Microware logo, and OS-9 are registered trademarks of Microware Systems Corporation.

All other company and product names mentioned are used for identification purposes only, and may be trademarks of their respective owners.