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Toshiba Establishes Presence in U.S. Wireless Market -- Increase Investment in Audiovox Corp. Wireless Subsidiary

30 May, 2002

Strategic Move to Mark Toshiba's presence in CDMA market

Tokyo -- Toshiba Corporation today announced that it would increase its minority interest in U.S. based Audiovox Communications Corporation (ACC), the distributor of wireless products for Audiovox Corporation. Toshiba will raise its stake in ACC to 25%, a move that will strengthen ACC in the fast growing wireless communications market and also allow Toshiba to establish its presence in the North American CDMA market.

Toshiba and Audiovox Corporation, ACC's parent, have partnered in the cellular business since 1984, when they were among the first companies to enter the industry in the United States. Audiovox Corporation launched ACC in 1993 to reinforce marketing of wireless products and in 1999 Toshiba took a 5% interest in the company. Today's announcement reflects the continuing strength of the long-standing Toshiba-Audiovox relationship and the determination of the partners to continue as a major presence in the fast growing CDMA market.

Today's agreement calls on Toshiba to raise its stake in ACC to 25% and gives ACC exclusive rights to sell Toshiba Mobile Communications Company products to carrier channels in North and South America. As ACC's preferred supplier, Toshiba will provide ACC with OEM CDMA terminals and Toshiba-brand terminals, which ACC will supply to carriers in North America. Toshiba and ACC will also take further steps to reinforce business development and strategy: Toshiba will appoint a director to ACC's board and work more closely with ACC in product planning and marketing.

Commenting on the agreement, Tetsuya Mizoguchi, Company President of Toshiba's Mobile Communications Company, said: "We welcome this strengthening of our strategic alliance with Audiovox. Over the years, we have developed a mutual trust and understanding that has supported our progress in the wireless market. This new agreement strengthens the ties between us and paves the way to a strong presence in 3G and future cellular products."

Mr. Philip Christopher, President and CEO of Audiovox Communications Corp. stated, "Success in the wireless market depends more and more on strategic alliances that combine the key elements of technology and distribution. The access to technology that Toshiba provides us should prove valuable as the 3G market develops."

CDMA terminals already account for the majority of sales in the North American cellular phone market. Toshiba estimates more than 30 million CDMA handsets were sold in North America in 2001 and predicts a market of almost 60 million units in 2004, following the launch of CDMA2000. ACC is a leader in the North American market, with a record of dramatic growth that has taken it to the No. 2 position among suppliers of CDMA handsets. On the basis of its increased interest in ACC, Toshiba will proactively work with ACC to enhance timely delivery of products that meets North American market needs and support continued business expansion. In future, the companies will also investigate extending sales to Latin and South America.

Toshiba is a leading presence in the CDMA market, known for bringing innovations and enhancements to standard handsets. The company is the No. 1 supplier of CDMA handsets in Japan and strongly positioned in the U.S. through its supply to Audiovox. In coming years, as CDMA continues to gain market share, Toshiba will continue to work to become the No. 1 CDMA vendor in the world market.

Outline of Audiovox Communications Corporation

Company NameAudiovox Communications Corporation
HeadquartersHauppauge, New York, U.S.A.
PresidentPhilip Christopher
CapitalAudiovox Corporation 75%, Toshiba Corporation 25%
EmployeesApproximately 230
Business Scale$966 million in 2001
BusinessSales of CDMA, TDMA and GSM cellular phones

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