Dauphin's OraLynx Set-Top Box Now In Production

16-Apr-01

Dauphin Technology, Inc. has announced that its first OraLynx digital set-top box (STB) model is now in production. This is the first of three models Dauphin plans to produce over the course of 2001. All three models will offer front-end services and capabilities including DSL, Ethernet, ATM, fiber optics, cable, satellite and dial-up modem, along with full computing capabilities.Dauphin's three model ""Tri-OraLynx"" marketing and production strategy is tailored to accommodate: a) the immediate product delivery needs of the company, b) cost competitiveness edge throughout production ramp-up, and c) time to market technology approach suitable for domestic and international markets. All three models will employ a common platform complemented by an array of interchangeable modules. Cost of each model will depend on type of configuration and market requirements. While domestic services are primarily cable-related today, other parts of the world are rapidly evolving or even leap-frogging to other means of infrastructure, mostly fiber. In any event, all three models of the OraLynx set-top box shall concur with or adapt to any current or future environments without becoming obsolete during the process of services changeover.""One day, every home will have a set-top box serving as a gateway to the Internet, entertainment, telephony and cyber-home automation. We are excited to be part of this technology evolution,"" comments Mr. Andrew Kandalepas, CEO/Chairman of Dauphin Technology, Inc. ""While many technology companies have already experienced considerable growth in recent times, we are looking forward just now to do so with the availability of our two leading products, the OraLynx and the Orasis,"" Mr. Kandalepas continued.The initial OraLynx model, currently in production, is an integrated high-end, full featured STB running on Windows, equipped with up to an 800MHz processor, 20-40GB hard drive, MPEG-2 decoder, up to 512MB memory and multiple interface options, including TV tuner (NTSC/PAL), fiber optics, Ethernet, DSL, cable, satellite, dial-up modem and more. The system can be used as a digital decoder or TV Web browser, connecting to a TV or computer monitor, providing services such as video on demand (VoD), video conferencing, voice over the Internet (VoIP), etc. Additionally, the first OraLynx model can be used as a standalone PC, simply by connecting it to a computer monitor. The product will be assembled at Dauphin's RMS manufacturing facility in McHenry, Illinois. First production units will be available for shipment to customers by mid May, with additional ramped up quantities in the month of May, June and July. Estimated quantities of this model are 2000-5000 units, due to the planned production implementation of the second OraLynx in the month of July 2001. Selling price will range from $550 to $975, depending on configuration and size of order. Units at the higher price levels are to be used in applications where high-end services are available. Lower cost units are targeted for customers/providers who plan to use them initially as a PC or Web Browser in the absence of broadband services and eventually evolving to other added services as they become available. Certain quantities of this model will serve as sales and marketing (demo/evaluation) units.The second OraLynx model is currently scheduled to go into production during the month of July 2001. It will have the same functionality as the first model with additional options such as DVD, record-playback functionality, MP3, digital audio output and video recording (30 hours). From a customer's perspective, the most significant differences will be apparent in the selling price and larger volume availability. Selling price is expected to range from $400 to $700, depending on configuration and size of order. The price reduction is attributed to current engineering efforts by integrating key technologies directly into the motherboard, more optimized packaging and therefore, less costly assembly requirements. Manufacturing of this model will be conducted using contract-manufacturing firms in conjunction with Dauphin's RMS facility in McHenry. As with the first model, the second OraLynx will sell at higher price levels to customers in need of high-end capabilities and lower price levels to customers of lesser need. Customers for the second model will consist primarily of small and large service providers domestically and abroad, including Estel Telecommunications S.A., Best Communications S.A., Danaos Peripherals and other providers the company is currently negotiating with. Potential domestic clients are those companies primarily engaged in planned community applications and hospitality industries including hotels, resorts and time-sharing resorts. Quantities of the second OraLynx model are expected to be in the area of 15,000 to 50,000 units.""We are very pleased with Dauphin's accomplishments in developing a truly impressive set-top box, now in the production stage"", comments Mr. Dimitrios Fessas, President of Estel Telecommunications S.A. ""Today, OraLynx is superior technologically to other STB's on the market, because of its multi-faceted architecture. Dauphin's strategy to develop its set-top box technology based on PC and/or embedded architecture is most brilliant. Our clients in Greece as well as other European markets will embrace its innovation, therefore, Estel will greatly benefit by the increased interest. Also, as strategic partners, we feel that this innovative family of products will strengthen our position in obtaining EU financing support for future manufacturing within the EU region"", added Mr. Fessas.Dauphin's third production OraLynx model is planned to go into production in September of 2001. Like its two predecessors, it will be equipped with similar capabilities running on embedded operating systems, including Linux. Its embedded design platform is based on a ""one board design"" concept, which will further reduce its cost and allow for mass production volumes. First phase design is completed and prototypes will be ready for testing in mid April. This Oralynx model will be Dauphin's miniaturized version with advanced technology components and enhanced software features. Selling will range from $250 to $450. Large volume contract-manufacturing firms will produce this model domestically and abroad, depending on customers' demographics, as well as cost savings associated with labor, shipping, import/export tariffs and economic development (subsidies) incentives. Quantities of this model will be possible to produce in any size. Based on pricing and volume requirements of the Estel contract previously announced, this OraLynx model meets those criteria. Estel has previously agreed to purchase certain quantities of the first two OraLynx models until the beneficial costs and volume quantities associated with the third OraLynx are successfully achieved. At these price levels and mass production abilities, this model will be also marketed globally to many developing countries. Current marketing information indicates that demand for this product will be significant, perhaps surpassing Estel's contract quantities during the same period.Additionally, Dauphin is targeting new emerging markets with its vertical solutions, which are not currently available by any other competitor. Dauphin is a world leader in having developed two complementary and totally synergistic products, the OraLynx STB with its broadband capabilities and the Orasis PC Tablet with its wireless features. This duet allows the Orasis to be used as a wireless high-end browser or even as a TV monitor connected to OraLynx. Any content, including movies, sports events, Internet, etc., can be taken out of the family room, wirelessly, on to the patio or other areas of the home. Similarly, video conferencing or even monitoring the appliances from outside the home can be performed wirelessly. This unique seamless, wireless connectivity between OraLynx and the Orasis Tablet PC paves the way for many new applications in residential and business environments, positioning Dauphin as the leader in mobile wireless broadband communications.Based on the Tri-OraLynx production plan, Dauphin will be able to better finance its initial manufacturing needs, provide better product quality and greatly reduce upfront risk. Revenue generation from the first two models, combined with possible banking arrangements then, and conversion of stock warrants issued during last year's private placement, will better enable the company to support larger volume production. The company also has access to funds through its $90 million equity line; however, management believes that successful sales of the products, conversion of warrants and banking assistance will greatly minimize the use of the equity line.For more information about Dauphin Technology, Inc., visit www.dauphintech.com.

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