Esmertec Forecasts 2006 Revenues of Over USD 24 Million.

Michel Kuntz Appointed EVP Sales to Strengthen the Organization's Market-Driven Approach

DUEBENDORF-ZURICH, Switzerland -- Esmertec[TM] (SWX:ESMN), a focused provider of software and services to communications device manufacturers and mobile telecom operators, is pleased to announce today that Michel Kuntz joins Esmertec, effective January 1, 2007, in the role of Executive Vice President Sales, responsible for driving Esmertec's sales organization globally. Before joining Esmertec, Michel Kuntz, 42, was Vice President Marketing and Sales EMAI and Latin America at Thomson Broadband from 2002 and before that was Vice President Marketing and Sales EMAI at Alcatel Mobile Phones & Broadband Access. He has 19 years work experience primarily in the telecommunications and technology sector.

The product development and marketing organization is being reorganized with the product line managers of both segments and a VP marketing reporting directly to the CEO. Georges Boulloy, who was instrumental in the reorganization process, will leave the Company and the position of Chief Product Officer will be eliminated. The company thanks George Boulloy for his important contribution during the past months, helping to chart the course for the company to become more market-driven.

Jean-Claude Martinez, CEO of Esmertec, comments: "We are very pleased to have such an experienced industry expert as Michel Kuntz coming on board. We believe this management extension, together with the expected strengthening of our board, is a strong sign of Esmertec's business potential."

After further operational reviews and in line with the product organization change mentioned above, management has decided to take additional actions to make Esmertec's product management and development operations more efficient. Esmertec's product management function for the Mobile & Multimedia Device Segment is henceforth planned to be managed centrally in Zurich, with certain positions currently located in the UK moving to Zurich. Additionally, consistent with Esmertec's policy of having customer services based close to its customers, certain project management functions currently based in the UK, but supporting US customers, will be moved to the US. Consequently, alternatives for the company's UK office are being evaluated in accordance with local legal requirements in the UK.

Business in the third quarter showed a solid pick-up. In particular, in the Mobile & Multimedia Device Segment shipments by customers in the third quarter increased to over 18 million compared with 10.4 million in the second quarter and 5.9 million in the third quarter of 2005. Third quarter shipments represent an estimated 7.2% share of the total mobile phone market, up from 4.4% in the second quarter of 2006 and 2.8% in the third quarter of 2005. Third quarter 2006 performance reflects strong shipments by large customers in preparation for the holiday season and Esmertec does not expect the same growth of shipments necessarily to continue in the fourth quarter. As of September 30, 2006, Esmertec's software has been deployed on over 340 mobile and embedded device models world-wide and over 76 million units had been shipped.

Esmertec now expects revenue of at least USD 14.5 million for the second half year, and consequently revenues of at least USD 24 million for the full year 2006. The current status of several new contracts and renewals in both segments support this outlook. Based on this information, Esmertec confirms previous guidance that it expects to begin generating cash from operations in the first half of 2007.

This communication contains forward-looking statements based on current expectations and assumptions of the company's management only, and involve certain risks and uncertainties. The forward-looking statements contained herein could be substantially impacted by risks and influences that are not foreseeable at present, so that actual results may vary materially from those anticipated, expected, or projected. Esmertec disclaims any intention or obligation to update and revise any forward-looking statements, whether as a result of new information, future events or otherwise.

About Esmertec

Esmertec is a focused provider of software and services to communications device manufacturers and mobile telecom operators. The company provides software platforms that enable the deployment of content and applications in devices and over servers. Customers include mobile telecom operators and manufacturers of mobile handsets, set-top boxes and interactive televisions. Esmertec's software and service capabilities excel with its reliability as well as fast and local execution. Founded in 1999, Esmertec is headquartered in Zurich, Switzerland with subsidiaries in China, France, South Korea, and the USA, and offices in Taiwan and the UK. Since 2005, Esmertec has been listed on the SWX Swiss Exchange (ESMN). www.esmertec.com

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