TechFaith A Handset Original Developed Product (ODP) & - - PowerPoint PPT Presentation

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TechFaith A Handset Original Developed Product (ODP) & - - PowerPoint PPT Presentation

TechFaith A Handset Original Developed Product (ODP) & Original Developed Content (ODC) Provider Jan 2008 (Nasdaq: CNTF) Page 1 HK000KRB Disclaimer This presentation contains forward-looking statements. These statements are made under


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TechFaith A Handset Original Developed Product (ODP) & Original Developed Content (ODC) Provider

Jan 2008

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Disclaimer

This presentation contains forward-looking statements. These statements are made under the ''safe harbor'' provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as ''will,'' ''expects,'' ''anticipates,'' ''future,'' ''intends,'' ''plans,'' ''believes,'' ''estimates'' and similar statements. Among other things, the business outlook and quotations from management in this announcement, as well as TechFaith's strategic and operational plans, contain forward- looking statements. TechFaith may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 20-F and 6-K, etc., in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about TechFaith's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number

  • f important factors could cause actual results to differ materially from those contained in any forward-

looking statement. Potential risks and uncertainties include, but are not limited to, TechFaith's limited

  • perating history, mobile handset brand owners' discontinuation or reduction of the use of independent

design houses, TechFaith's ability to retain existing or attract additional international customers, TechFaith's earnings or margin declines, failure of competing against new and existing competitors, and other risks

  • utlined in TechFaith's filings with the U.S. Securities and Exchange Commission, including its registration

statement on Form F-1, as amended. TechFaith does not undertake any obligation to update any forward- looking statement, except as required under applicable law.

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Contents

Industry Evolution Unique ODP Provider Product Development Status Customer Base Appendix

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Top Five Brands

Japanese Brands Chinese Brands European Brands Carrier Brands

Niche Brands

Local Brands Premium Brands

1980 - 1995 1995 - 1998 2006 - 2007 2000 - 2005 1998 - 2000 2008 - Future

Global Handset Players Get More Diversified

2008 - Future

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CDMA1X GSM/GPRS GSM/GPRS/EDGE TD-SCDMA WiMAX CDMA 2000/EVDO WCDMA HSDPA WiFi HSUPA

Wireless Standards and OS Get More Complicated

3G 2G/2.5G to 2.75G 3.5G/3.9G Mid-90s 2000 2005 2010 2002 2007

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Software workload in handset R&D 50% in 2G GSM 75% in 2.5G GPRS 85% in 3G WCDMA & EVDO

DRM Stack

WAP PUSH Engine PictBridge Engine

Software Becomes the Key Value Driver

Mobile Solutions Suite

MMS App UMB Browser App PictBridge App SyncML App Other Apps Browser Engine MMS Engine Email Engine PUSH Engine SyncML Engine SMS / EMS Engine WAP 1.2 / 2.0 HTTP 1.1 SSL 3 / TLS1 DRM 1.0 DRM 2.0 TechSoft Universal Platform OS / RTOS

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Fast-Growth Opportunities for TechFaith

Small players are not capable of providing original

developed products;

Big players can not cover a full spectrum of

technologies from 2G to 3.5G;

Carriers are promoting their own services with

rich software applications;

Dual-mode handsets are in high demand by

carriers running two network systems or by international roamers.

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Contents

Industry Evolution Unique ODP Provider Product Development Status Customer Base Appendix

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Customer Brand Owner

Total Handset Software & Design Solutions

Drivers on Different OS Frame work API MMI: Specific Features for Different Operators U I

MMI: Common Features Hardware Design Industrial Design/Mechanical Design Application Software

TechFaith owns

customer relationship

EMS is available

for production if brand owner

  • utsources

manufacturing

EMS Production Line

Chipset

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Cutting-Edge Technology Alliances

Strategic partner to develop Smartphone technology Enabler of CDMA technology Strategic investor Collaborative founding “TechSoft”

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May ’06 - Application

Software Co. - Jointly Invested by Qualcomm

Sep ’06 - Launched

Window’s Smartphone

Apr ’07 - Launched

HSDPA Smartphone

Nov ’07- Launched

HSDPA Data/Voice Card

Volume based business Higher ASP from games

and other contents.

Extra revenue from game

service, game terminals and UMPC.

ODP & Content Provider 2008 Company Founded 2002 Independent Design House 2002-2005

July ’02- Founded May ’05 - NASDAQ IPO Oct ’05 - Launched First 3G WCDMA/UMTS

Handset

Original Dev. Product (ODP) Provider 2006-2007

Q1’08 – Online

Interactive Game Business Unit Plan to Found

Company Profile – NASDAQ: CNTF

Project based business Revenue mainly from NRE Share the volume business via Royalty

income.

Volume based business

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R&D in Chengdu

Business Model - ODP & ODC Provider

Original Developed Products Contents Web Server

ODP facilitates Contents to test and run on a variety of platforms Contents enrich application of ODP Contents work for both PC and handsets creating a new business opportunity

Application Software Windows GMS/TD-SCDMA UMTS/HSDPA CDMA/EVDO

PC PSP Phone

R&D in Hangzhou R&D in Beijing

2008

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R&D in Chengdu

Revenue Generation from New Business Model

Contents Web Server Higher handset ASP from enrich application contents New revenue from game services (points, ads, license fee…) New revenue from game terminals PC PSP Phone

R&D in Hangzhou R&D in Beijing

2008

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Contents

Industry Evolution Unique ODP Provider Product Development Status Customer Base Appendix

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170 Feature Phone Gross Margin > 20%

45 58

Smartphone & PPC Phone Gross Margin > 25% Low Tier Gross Margin > 10% 450

TechFaith’s Product Position

  • Focusing on Mid to High Tier

90 Cost Wholesale Price

50

Low Tier Middle High Tier

35 100 180 20 Unit: US$ 35

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170

45 58

CDMA1X Gross Margin 10%-40% HSDPA Gross Margin 20%-40 % GSM Gross Margin 10%-30% WCDMA Gross Margin 15%-30%

Low Tier Middle High Tier Cost Wholesale Price

50 450 35 100 180

90

TechFaith’s Product Position

  • Focusing on Mid to High Tier

35 20 Unit: US$

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HSDPA Data/Voice Card - Pike

Band HSDPA2100/GPRS10/GSM900/DCS1800/PCS1900MHz Memory 160MB LCD 0.8’’ OLED Camera N/A Entertainments Modem/MP3 AAC /AAC+ Communication Mini USB Talk time 3G: 47~120 mins /2.5G: 100~220 mins Standby time 150-270 hrs Battery 580mAh Size 98*36*16mm/56g Schedule Oct, 2007

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GSM GSM PPC Phones

Launched

Technology Combinations in High Demand

Feature Phones

Q4’ 2007

Digo S26

Q1’ 2008

Twins Yin Tai

GSM CDMA GSM GSM GSM GSM

T7620+ T7630

GSM CDMA

T7620

GSM WCDMA

Twins Cynthia 850 Gallic

GSM GSM CDMA WCDMA GSM TD-SCDMA

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Platform TI OMAP 850 (200MHz) Band EDGE / GSM / GPRS 850/900/1800/1900MHz Memory 2GB + 64MB LCD 2.4’ QVGA TFT Camera 2.0 M Main camera Entertainments 64 Poly MP3 / MP4 / MIDI / AAC / WMA / WMV / MSM / MMS Communication ActiveSync / WAP / JAVA / WiFi 802.11b/g / Bluetooth 2.0 / Mini USB / Windows IE browser Talk time 200 mins Standby time 120 hrs Battery 1100mAH Size 111*53*12.5mm Schedule Nov, 2007

Slim Windows Mobile – Vista 850

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Band GPRS10/GSM900/DCS1800 /PCS1900MHz/EDGE Memory 256Mb+64Mb /A2DP LCD 2.2’’QVGA TFT Camera 2.0 M/ 1.3 M optional Entertainments MP3/AMR/AAC/AAC+/MP4 /3GP/Voice video recorder Communication MMS/STK/PC Sync/WAP 2.0 /Bluetooth 2.0 A2DP/Java 2.0 Standby time 220 hrs Talk time 180 mins Battery 770mAh Size 110*47*10.9mm Weight About 100g Schedule Dec, 2007

Music Phone - Rock

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Contents

Industry Evolution Unique ODP Provider Product Development Status Customer Base Appendix

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HK000KRB HK000J5S

22

Russia China Japan Taiwan Indonesia India Brazil United States Egypt Ukraine Europe Malaysia Vietnam Thailand South Korea United Arab Emirates

Worldwide Market Coverage

Turkey Saudi Arabia Morocco Algeria Canada Libya Yemen

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Africa Europe Russia North America Latin America China South East Asia India Middle East Africa

TechFaith’s Worldwide Customers & Prospects

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Contents

Industry Evolution Unique ODP Provider Product Development Status Customer Base Appendix

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TD-SCDMA Update TD-SCDMA Update

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Q3/07 Q4/07 2009

Engineering Sample Mass Production

TD-SCDMA Product Road Map

TD/GSM AR + AH + EDGE HSDPA2.8M /GSM + AR +AH+EDGE Linux-based & One-chip Low-cost HSUPA (UMTS)

Engineering Sample Mass Production Mass Production CTA of Feature Phone & Data Card No.1 CNC Qingdao Field Testing Demonstration at PT/EXPO COMM CHINA 2007 Working Sample for MII Field Testing

Q1/08 Q3/08

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Development of TechFaith’s TD-SCDMA Projects

  • Phase I product achieved top one score in field test of CNC Qing Dao Branch in

Sep 2007. The company chose TechFaith’s product as the only benchmark for

  • ther suppliers such as ZTE, Huawei, Samsung, and LG.
  • Two models of feature phone and one model of data card were shown to the

public in our customers’ counters at PT/EXPO COMM CHINA 2007 from 23rd-27th Oct 2007.

  • Data card won CMCC bidding ( two winners). Two models of feature phone are

joining the CMCC bidding. Bidding result will come in Feb, 2008.

  • In late January, TechFaith will provide data card working sample of 2.8Mbps TD-

SCDMA HSDPA for field testing held by MII in our customer’s name.

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Key Component Suppliers Key Component Suppliers

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Component Suppliers

PA Suppliers

(1) NXP Platform: RFMD and Skyworks. (2) Qualcomm Platform: Avogo and Anadigics (3) T3G: Maxim

LCD Suppliers

(1) Samsung SDI: 2.2 ", 2.4 " QVGA (2) Tovis: 1.8 " QCIF, 2.8" QVGA (3) Sharp: 1.8 " QQVGA, 2.6" WQVGA, 3.0" WVGA (4) CASC: 2.2 " QCIF, 2.4 " QVGA (5) TPO: 2.5 " QVGA landscape

GPS Supplier: SiRF Finger Print Recognition Suppler: Atrua

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ODP & ODC Business Models Allow TechFaith to Build Its Competitive Advantages, Achieve Fast Growth, and Maintain Sustainable Profitability

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