Pace and Philips Partner To Develop A Home Media Center For Wireless Video Distribution Throughout The Home.

Business Editors/Technology Writers

Cable 2002

Booth #1161

NEW ORLEANS--(BUSINESS WIRE)--May 6, 2002

Pace Micro Technology plc and Philips' (NYSE:PHG) (AEX:PHI) semiconductor division announced today they are working together to push the boundaries of digital television by exploring new opportunities for cost-effective wireless content distribution in the home.

The two technology leaders have agreed to develop an advanced solution for the industry by using the 802.11b wireless standard for low-cost distribution of multiple video streams within a wireless home network. Additionally, Pace and Philips will also explore the use of other connectivity technologies. Powered by 802.11b-based wireless LANs, the worldwide "no additional wires" home networking market is poised to grow to $2.4 billion by 2006, according to ABI's recent study, "Home Networking Equipment - A Practical Assessment of Technologies and Changing Market Dynamics."

Pace brings to the partnership the Pace Home Media Center (PHMC), which uses the digital home gateway as the portal for interactive communications and content distribution. It enables electronic devices to link with each other in and around the home through the use of existing wiring or wirelessly via 802.11b to realize a `no additional wires' approach. The PHMC also enables communication with the outside world via any digital two-way platform. The Pace HMC solution can support simultaneous viewing on multiple screens, networked personal video recording (PVR) capabilities, Internet browsing, multiple format decoding and other applications, providing network operators the opportunity to generate new revenue streams and reduce subscriber churn.

Philips offers its technology leadership in the areas of connectivity, digital video, security and identification with its Nexperia(TM) Home Entertainment Engine (HEE), designed for use in advanced set-top boxes, digital consumer systems and networked applications. With the power and highly integrated architecture of Philips Nexperia(TM) technology, the Pace HMC can accommodate and process all different forms of digital content.

"The Yankee Group projects that 12.4 million U.S. homes will adopt some type of home networking capability over the next year. With predictions like that, it's important for Pace to lead the industry in developing a sensible solution that works and is affordable for network operators to deploy," said Andy Trott, Pace's Network and Connected Devices Division President. "We are working with the best of breed technology partners, like Philips, with its Nexperia platform, to develop the right solution as quickly as possible, which can be based on 802.11b as well as other connectivity technologies," he added.

"We foresee the next major step in the evolution of a digital set-top box to be the shift to home networks. We are pleased to partner with Pace, a leader in Europe and the U.S., to deliver the first home media server designed to be mass deployable to the cable industry. Together we are using 802.11b wireless technology that is cost-effective and deployable," said Indro Mukerjee, Executive Vice President and General Manager, Marketing and Sales of Philips Semiconductors.

To view a demonstration of this wireless video home networking solution, visit the Pace Micro Technology booth (#1161) at Cable 2002.

About Pace Micro Technology

Pace Micro Technology plc is a pioneer of digital technology for the home and has helped build the global market for pay television services. Using this expertise, Pace is evolving the set-top box into a sophisticated home gateway to enable revenue-generating services for TV and the networked home.

In this networked home, the Pace home gateway is the portal for entertainment and interactive communications around the home and with the outside world. Pace analog and digital technology has been installed in over 14 million homes worldwide since it was founded in 1982. The company is now actively involved in all digital platforms - satellite, terrestrial, cable and xDSL - through relationships with broadcasters, network operators and technology partners in the U.K, USA, France, Europe, Latin America, Australasia and the Far East. These achievements were made possible through the commitment of Pace's 1,000-strong workforce, over half of whom are research and development engineers, dedicated to the development of digital technology for the home and small and home office markets.

Pace Americas office is based in Boca Raton, Fla., with its head office in West Yorkshire, England. Additional offices are throughout England, the U.S., France and Hong Kong. The company's shares are traded on the London Stock Exchange (LSE:PIC) . For further information, please visit Pace's web site at http://www.pacemicro.com.

About Philips

Royal Philips Electronics of the Netherlands is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 32.3 billion in 2001. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 186,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, and medical systems. Philips is quoted on the NYSE (NYSE:PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at http://www.philips.semiconductors.com.