ASIA : Comtech Group based in China, announced the first major design win from Huawei for customized 3G cell phone modules. Comtech will provide customized module designs for use in Huawei's new Vodafone-branded 3G phone. Comtech HQ Shenzhen shown left.

In February, Huawei signed an important strategic agreement with Vodafone to become the exclusive supplier of Vodafone's consumer 3G handsets across 21 countries for a period of at least five years. It is anticipated that Huawei will commence manufacturing of these phones with shipments to Vodafone expected during the second half of this year. Comtech expects to begin recognizing revenue during the third quarter of this year and continue to benefit from Huawei's long term business with Vodafone.

Comtech has worked closely with its mobile handset OEM customers over the past several years to develop customized modules targeting the 2G market, including GSM and CDMA. This new design win with Huawei is significant as it now allows the Company to establish a presence in the 3G marketplace and capitalize on Huawei's strategic product expansion into handsets. It is expected that Huawei will leverage its strong position in the 3G equipment area to become a leading 3G handset provider in both China and the worldwide market. To expand the overall opportunity, Comtech's modules can also be utilized in several different phone models with multiple manufactures, realizing an additional revenue stream. Additionally, Comtech is well positioned to compete within the 3G market, as Comtech's customized module designs focus on functional and desirable model features with products compatible on all next generation standards such as WCDMA, CDMA2000 and TD-SCDMA.

"This design win is significant for Comtech, as it is our first major deal within the 3G market and is consistent with our strategy to identify high growth opportunities where we can leverage our existing customer relationships to produce orders," commented Jeffrey Kang, Chairman and Chief Executive Officer. "Our 3G handset business has just begun to ramp up production with most products currently shipping to the overseas market. We anticipate strong growth in domestic orders once the government of China grants initial 3G licenses later this year. We have spent over three years in research and development with our partners to help bring this technology to market and believe the investments we have made has helped to solidify our relationships while giving us a defensible product platform. We are pleased to work with Huawei and other leading cell phone manufactures as we look to capitalize on the growing worldwide demand for 3G services and products for the years to come."

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