Casio PhoneMate Announces Entry Into Commercial Telephony Market With New System Telephones.

TORRANCE, Calif.--(BUSINESS WIRE)--Jan. 25, 1999--

New Product Family Aimed at Small Business; Company to Augment

Distribution Through Office Superstores with Programs for VARs,

Integrators

Casio PhoneMate, Inc., a leading provider of telecommunications products to consumers, announced today that it will offer a new family of affordable, multi-line "System Telephones" for small office and home-based businesses, marking the company's entry into the commercial telephony market.

At the same time, Casio PhoneMate announced that it will launch an aggressive series of programs for resellers, interconnect vendors, telephony product installers and systems integrators, aimed at building multi-tier distribution. Best known as a popular retail brand, Casio PhoneMate said its line of system phones will also be available through the office superstore channel and at other select retailers nationwide.

When they reach the market this spring, the Casio PhoneMate system phones will deliver big business performance to small businesses and home offices. The new line of system telephones -- commonly characterized as "KSU-less" -- represent an advanced telephone and messaging solution for a fraction of the cost of expensive, custom-installed, centrally-controlled systems.

"Increasingly, small business and home-based operations are thinking like larger enterprises and acting accordingly," said Stephen Knuth, president, Casio PhoneMate, Inc. "For many of these companies, Job No. 1 is securing an affordable communications infrastructure -- one that can accommodate growth, cost-effectively. And these days, that means looking beyond the local telco. Even more than the computer, the telephony system is the company's nerve center and the gateway to profits. Selecting wisely is crucial, often complex and, more than ever, a thoroughly strategic decision.

"We see a tremendous opportunity for small businesses to grow with system phones that don't require any special hardware or key system," Knuth said. "The SOHO segment is exploding, and we're committed to hitting the sweet spot in the market, with a product family that delivers sustainable price/performance advantages. We're offering a robust, network-based system with PBX functionality, a versatile system configuration, plug-and-play interconnectability, and expandability to a full four-lines by 12-stations. We've integrated directed messaging and our Auto-Attendant capability into a responsive solution that fast-track small businesses simply won't find anywhere else."

Casio PhoneMate defines a "system phone" as a telephone capable of station-to-station interaction without using Central Office lines, including intercom and call transfer functions. System phones also offer such advanced operations as voice mail, directed messaging (to an individual voice mailbox) and Auto-Attendant, the "virtual operator" capability that routes incoming calls automatically to other stations.

Users simply plug into standard phone jacks and rely on existing wiring; data communication occurs through a common line 1. A "KSU-less" system phone doesn't require a centralized controller (like a PBX) or a key system. Phones share functionality, and all phones are equal.

According to the research firm IDC/Link, the small business telephone market is $3.8 billion strong, with companies of 20 employees or less accounting for more than half the total; companies with 5 employees or less constitute nearly 30 percent of the market. At the same time, more than 40 percent of all U.S. small businesses have two or more lines, driven by SOHO market growth and the Internet.

Data from CEMA, the Consumer Electronics Manufacturers Association, reinforces this trend in U.S. households: currently, 23 percent of homes are wired for 2 lines and fully 5 percent use 3 or more phone lines.

Although research confirms that small businesses are heavy users of phones and multiple lines, penetration of non-KSU hardware is modest, ranging from a shade under 10 percent in businesses of less than 10 employees to roughly 15 percent in businesses of up to 50 workers, IDC/Link reports.

Currently, 60 percent of small businesses have 5 telephone stations or less, and fully 75 percent have 10 or less. On an industry segment basis, the financial and legal services sectors are the heaviest users of multiple lines and stations by a wide margin.

A Connected Product Family

In the first half of 1999, Casio PhoneMate will offer three KSU-less solutions, beginning with the SI-460, a 4-line/12-station system telephone:

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--   The SI-460 provides voice paging, hands-free intercom and station
     status indication. As a telephony device, the unit incorporates
     Type 2 Caller ID, digital duplex speakerphone, call privacy,
     headset jack in the base and a corded handset, 20 autodial memory,
     line status indication, and automatic line selection. Augmenting
     the standard system features, the SI-460 also includes an
     individual station voice mail with up to six selectable greetings
     and timer-controlled greetings, plus an answering machine that
     features Auto Attendant, call screening, do not disturb, and
     remote message retrieval. The SI-460 incorporates three Casio
     PhoneMate-issued patents and one applied-for patent. The phone
     will be available for less than $300.

--   In the second quarter, Casio PhoneMate will introduce an
     entry-level four-line telephone system with intercom, page and
     call forward functions, plus Type 2 Caller ID display. Like the
     more sophisticated SI-460, this system phone will support up to
     12 stations, and provide voice paging, hands-free intercom, and
     station status indication, along with the full complement of
     telephony functions.

--   Rounding out the product family -- and scheduled for mid-year
     delivery -- is a top-of-the-line four-line 900 MHz cordless
     telephone system with Auto Attendant, Caller ID and a full-duplex
     speakerphone. The unit will offer the same system and telephone
     features as the other two products, plus 900 MHz of cordless
     telephone flexibility.

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All three models can be configured together in a single system with up to 12 stations.

About Casio PhoneMate

Founded in 1968, Casio PhoneMate, Inc. is a leader in the development and design of telecommunications products for home, home/office and small business consumers.

The company has consistently introduced industry "firsts," including one of the first commercially available telephone answering devices (TAD), the first TAD with integrated cordless telephone, the first implementation of synthesized voice prompting and time/day stamp, the first all-digital TAD, the first cordless telephone with Call Waiting Caller ID display, the first combination telephone answering device to let users check their electronic mail and, with Modem Monitor(tm), the first technology that prevents the telephone from interrupting an online session or a fax transmission. Based in Torrance, California, Casio PhoneMate continues to pioneer high-quality, reliable and cost-effective communications solutions.