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CONEXS.COMTM ELEVATES SMITH MICRO'S POSITION AS A WORLDWIDE PROVIDER OF MASS MARKET INTER

Feb 23, 1999
The Funneling of Voice, Video, Data, and Fax Traffic Over the Internet is Being Touted as the Next Big Evolution in Technology- Smith MicroTM is Delivering Innovative IP and Internet-Based Communications to Users as the Industry Takes a Serious Look at Internet Convergence.

ALISO VIEJO, CA - Smith Micro Software, Inc. (Nasdaq NMS: SMSI), a worldwide manufacturer of person-to-person communication software solutions, today announced that the company will continue its commitment to become a leader in IP and Internet-based communications. In that effort, Smith Micro announced the release of conexs.com - a new, mass market Internet communication service offering real-time Internet chat and phone capabilities with a video phone option.

"There is an Internet communications revolution going on, and Smith Micro is in the center of it," stated William W. Smith Jr., president and chief executive officer of Smith Micro. The company's initial focus was to develop modem software for major OEMs. Today, the company has a four-prong approach to drive Smith Micro into the explosive growth of the Internet and build a service-based business.

The first prong is to continue its focus on developing a broad OEM business that includes software for the modem industry, video conferencing software solutions for the camera and PC markets, and, with the advent of the Internet CommSuiteTM product, position the company to provide OEM software for cable modems, xDSL modem and Internet service provider markets. Second, is the retail prong where Smith Micro has experienced significant growth by focusing on the after-market with its entire product line. Third, is the Corporate VAR prong where the company is providing a different set of products built around the HotFax® Share line with IP Gateway.

Smith Micro's new fourth prong is the service market beginning with the conexs.com service that offers the mass market a method for connecting the Internet population together for the purpose of real-time, person-to-person Internet communication.

"This alternative method to the telephone brings the advantages of the Internet such as lower cost and convenient communication to the forefront of society," commented Smith. conexs.com will provide Internet users around the world with the capability of having their everyday Internet communication protected from unwanted calls and unsolicited online materials associated with these type of calls, through the "user-authorized" activation of the Pentium®III processor serial number feature. As part of the conexs.com service user registration process, users are required to enter their legitimate e-mail address, establishing a consistent calling format similar to that of the telephone system.

"conexs.com is Smith Micro's first service that we believe truly transitions us into an Internet company," said Smith. "This new service provides significant benefits for both the PC manufacturers that pre-load conexs.com, and Internet users who receive cost-free and effective communications. In addition, it provides our company with a broader business base and increased revenue."

The model for conexs.com is similar to the Internet Portal business model. The primary goal for any Internet Portal company such as Yahoo!®, Excite, Lycos®, Infoseek® and others, is to strive for a large customer base and sell advertising. Acquiring a large user base though usually requires a company to significantly invest in sales and marketing, thus decreasing the company's profitability.

In entering this market, Smith says, "Smith Micro's model is similar to the Portal model, but has many advantages." The company has a strong OEM heritage and understands how an innovative offering, such as conexs.com, can add value to a PC when pre-loaded. "We anticipate our OEM relationship with PC manufacturers will assist in generating both revenue and a large number of users quickly. Additionally, conexs.com will offer a strong opportunity to sell advertising similar to the Internet Portal model without the huge up-front costs of acquiring a large number of users."

Smith Micro plans to offer conexs.com users a variety of add-on services such as a powerful fax service allowing unlimited fax transmissions anywhere in the world to another conexs.com user at a nominal annual fee. In addition, the company will offer a client software upgrade, its Internet CommSuite product, which will be conexs.com compliant.

"Additional services such as the ability to have voice messages or audio/video messages left for you when you are not connected to the Internet, are also planned," stated Smith. Users will be allowed to retrieve these messages at a later time automatically when they connect to the Internet. These services will also be offered at a nominal fee.

Smith Micro will benefit from the variety of revenue sources provided by conexs.com. The transitioning of products and services to the Internet market bodes well for Smith Micro with the coming era of Internet convergence. Smith Micro is in a perfect position to offer an easy, real-time, person-to-person Internet communication solution for the mass market.

Smith Micro Software, Inc.

Smith Micro Software, Inc. (Nasdaq NMS: SMSI) is a worldwide manufacturer of state-of-the-art, person-to-person communication solutions designed for the Internet and traditional applications. Its latest development, conexs.com , is an Internet-based service that offers a real-time, cost-efficient alternative to the telephone. It is easily accessible from any PC and is free of traditional phone company calling costs.

conexs.com is currently available to original equipment manufacturers (OEMs) as a pre-loaded Internet communication solution. Smith Micro's complete line of products are available through direct sales, retail stores, value-added resellers (VARs) and OEMs.

Corporate headquarters is Smith Micro, Software, Inc., 51 Columbia, Aliso Viejo, Calif., 92656. Telephone: (949) 362-5800. Fax: (949) 362-2300. For more information about Smith Micro and its complete line of products, visit the company's Web site at www.smithmicro.com. To become a VAR partner, visit the VARPlus "Partner in Profit" Program Web site at www.smithmicro.com/varplus.

Smith Micro, the Smith Micro logo, conexs.com, FAXstf and STF Technologies are registered trademarks or trademarks of Smith Micro Software, Inc. All other trademarks and product names are the property of their respective companies.

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