ARCHIVE 2006

Jean-Claude Martinez confirmed as CEO of Esmertec

Dübendorf, Zurich, Switzerland, July 3, 2006 - Esmertec, a leading provider of world-class software solutions and services for the telecommunication, interactive multimedia and consumer electronics markets, is pleased to announce that the Board of Directors has confirmed the appointment of Jean-Claude Martinez as CEO of Esmertec. Since his appointment as interim CEO in May 2006, Mr. Martinez has organized his management team in order to achieve key objectives: improve Esmertec's operational performance and position the company more aggressively in its targeted markets.

Jean-Claude Martinez has been an integral part of Esmertec since he joined the Company in June 2002 as Senior Vice President of Sales. In March 2004, he was appointed Chief Operating Officer, and from the end of 2005 until mid-May 2006, he focused on growing the business of the Mobile Operator Division worldwide. Hans-Ulrich Müller, Vice Chairman of Esmertec's Board of Directors, comments, "Jean-Claude has over 25 years of experience in the IT and telecommunications industry and is a hands-on manager who works closely with his team. The Board is confident that he will lead Esmertec back to its growth path."

Reporting to Jean-Claude Martinez are Georges Boulloy as Chief Product Officer, Deborah Choate as Chief Financial Oficer, Sylvie Vollet as General Counsel and VP of Human Resources, and Jean-Luc Gianduzzo as Executive Vice President (EVP) of Global Services.

The senior management team has taken the following actions to improve operational efficiencies:

Global sales and service organization: This organization is now structured into two groups, one focusing on sales and one on services, thus removing one layer of management. The Services Group is responsible for customer software and engineering projects, customer support, mobile operator services, and specialized outsourcing services for the mobile industry. This group will be led by Jean-Luc Gianduzzo, EVP of Global Services, who joined Esmertec on June 1, 2006.

Mr. Gianduzzo has over 16 years of international experience in business development and marketing of high-tech solutions and services, and has been based in Switzerland for the past 10 years. Prior to Esmertec, Mr. Gianduzzo was CEO at NEXThink, and has held senior business development positions at Hewlett Packard and Cisco Systems Europe.

Following the disappointing sales performance and the restructuring of the sales and service organization, Billy Crotty, EVP Sales and Operations Worldwide, left Esmertec on June 30, 2006. Esmertec is presently recruiting the EVP of Sales to lead the Sales Group, and Jean-Claude Martinez will manage this position ad interim.

Cost reductions: Management has decided to close down Esmertec's subsidiary in Denmark and reduce significantly the operations in Japan. The company has assigned resources from other Esmertec's offices and in Japan to continue supporting the products and customers in these regions.

Through the restructuring and other cost saving actions, Esmertec expects to reduce its operating expenses by 15 to 20% from the current run rate, including investments in product development. The management expects to benefit from the full impact of the reduced costs beginning with the fourth quarter of 2006. Pre-tax restructuring cash expenses, excluding any impact of impairment losses on intangible assets, are estimated to be in the range of USD 2 million to USD 2.5 million, and Esmertec expects to record most of the restructuring costs in the 2006 first half-year results.

Esmertec will continue to invest in developing innovative products, expanding its Java-based product portfolio and increasing its product offering to mobile operators through its product development operations in China, France, Switzerland, and in the UK.