SOURCE: China TechFaith

China Techfaith

September 30, 2009 09:00 ET

TechFaith and Dmagicmobile Form Joint Venture to License Well-Known, International Brands for Mobile Phones; Initial Product Launches Scheduled for 4Q09

BEIJING--(Marketwire - September 30, 2009) - China Techfaith Wireless Communication Technology Limited (NASDAQ: CNTF) ("TechFaith") and D Magic Mobile (Shanghai) Incorporation ("Dmagicmobile") today announced the formation of a joint venture company in China. The joint venture will be called Glomate Mobile (Beijing) Co., Ltd. ("Glomate"). Glomate plans to license well-known, international bands through Dmagicmobile for high-end, brand-name mobile phones that target fashion-conscious and high-end mobile phone users, teenagers and sports fans. Initial product launches are scheduled for the fourth quarter 2009. TechFaith is a China-based original developed product provider focused on the original design and sales of cellphone products. Dmagicmobile is a cooperative licensee with a number of renowned international brands in the mobile telecommunications sector, including Barbie™.

Mr. Defu Dong, Chairman and CEO of TechFaith, said, "This is an important development for TechFaith. Our approach since founding the company has been to use dedicated resources able to focus on unique market opportunities. We have successfully applied this model to our existing business. In the mobile phone business, we continue to drive growth in our ODP business and will now add on the new, Glomate business. Our ODP business will continue to focus on domestic and international brand name companies, and operators with mid- to high-end product offerings with flexible customization. We expect Glomate, will give us a vehicle to even better differentiate our mobile phone offerings in the marketplace. Unlike in other markets, in China carriers do not subsidize most consumer purchases of mobile phones. Most consumers in China decide what phone they want to spend their money on and then buy it. With potentially several thousand mobile phones to pick from, a well-known brand is a powerful competitive differentiator. Similar to watches, clothes and other products, consumers will be able to buy a mobile phone with a brand that they identify with from a lifestyle, image or goal standpoint. A brand, therefore, can prove to be far more powerful than a new technology, as technological developments are typically commoditized and adopted by all mobile phone developers. As we move forward, we expect our Glomate business will bring us additional, higher gross margin business opportunities."

Mr. Samuel Pang, Dmagicmobile's President and CEO, commented: "Today's announcement represents a significant milestone. Our partnership with TechFaith is a natural extension of both companies' prior relationship and successful track records. Dmagicmobile understands the complexities of the branded market and what is involved in bringing a profitable, successful brand to market as a mobile phone. Our new joint venture will help both companies more effectively address this business opportunity. Glomate is a key element of our major business expansion as we expect it will attract more international brand owners wanting to address their interest in our sustainable cooperation. We look forward to leading the new company in its strategy to leverage the unique strengths of Techfaith and Dmagicmobile, and to bring successful profitable growth to both companies."

About TechFaith

TechFaith (NASDAQ: CNTF) is a China-based original developed product provider focused on the original design and sales of cellphone products. TechFaith is also striving to build a leading PC and online gaming business through its wholly-owned subsidiary, One Net Entertainment Limited. One Net Entertainment is leveraging an integrated model that combines self-developed as well as co-developed and licensed content. TechFaith employs approximately 500 professionals, of whom approximately 90% are engineers.

--  TechFaith engages in the development and production of middle to high
    end handsets and tailor made handsets.  TechFaith's original developed
    products include: (1) multimedia phones and dual mode dual card handsets of
    multiple wireless technology combination such as GSM/GSM, GSM/CDMA,
    GSM/WCDMA, GSM/TD-SCDMA and UMTS/CDMA; (2) Windows-based smartphones and
    Pocket PC phones; and (3) handsets with interactive online gaming and
    professional game terminals with phone functionality.
    
--  With the capability of developing Middleware Application MMI/UI software
    on 2G/2.5G(GSM/GPRS, CDMA1X), 3G(EV-DO, WCDMA/UMTS, TD-SCDMA) and
    3.5G(HSDPA) communication technologies, TechFaith is able to provide
    Middleware Application MMI/UI software packages that fulfill the
    specifications of handset brand owners and carriers in the global market.
    For more information, please visit www.techfaithwireless.com.
    
--  TechFaith is targeting both the mobile and online PC gaming markets
    through its websites www.798uu.com and www.798game.com, respectively.
    Three massive multiplayer online role-playing games (MMORPGs) are planned
    to launch in 2009 for online PC users on www.798game.com.  16 titles are
    planned to launch for mobile gamers on the company's Chinese mobile games
    website www.798uu.com.
    

About Dmagicmobile

D Magic Mobile (Shanghai) Incorporation ("Dmagicmobile") is a wholly foreign-owned enterprise registered in Shanghai. As the cooperative partner of a number of renowned multinational corporations including Mattel, Inc (Barbie Brand), and several entertainment companies, Dmagicmobile specializes in the niche market segment. Supported by a team of over 100, Dmagicmobile provides comprehensive solutions of research and development, ID design, UI design, packaging solutions, product strategies, after-sale services and sales and marketing programs for the mobile telecommunications sector.

Safe Harbor Statement

This announcement 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," "confident," "outlook" and similar statements. Among other things, the business outlook and strategic and operational plans of TechFaith and management quotations 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 of 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, those risks outlined in TechFaith's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. TechFaith does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

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