CIC Signs OEM Agreement with IBM to Market Pen-Based AS/400 Computers in China

March 22, 1993 — Communication Intelligence Corp. (NASDAQ:CICI) (CIC) Monday announced the signing of an OEM agreement with IBM’s Application Business Systems.

Under the terms of the agreement, IBM will sell OEM versions of its Application System/400 (AS/400) computer products to CIC, which will be integrated into CIC’s pen-based computer product line being designed for the China market.

NOTE: This follows the Jan. 26, 1993, IBM announcement stating that IBM Personal Software Products Division is now the distributor and exclusive sublicensor of CIC’s PenDOS and Handwriter Recognition System for PenDOS to other pen hardware manufacturers worldwide.

“CIC plans to market its Chinese, pen-based office automation system through partnerships with the Chinese government, and we expect to ship the first of these systems within twelve months,” said James Dao, president and chief executive officer of CIC.

“This OEM agreement represents the first implementation of our marketing plan for China. CIC intends to use the best components worldwide to create outstanding pen computing solutions for this market. We are pleased with our relationship with IBM’s Application Business Systems. Their AS/400 mid-range computers are ideally suited for the Chinese solutions we are creating. IBM’s close cooperation with CIC will accelerate our products’ development cycle and time to market.”

The products, currently under development, will take advantage of CIC’s expertise in pen-based computing and systems integration to create a practical and economical approach to computerizing China’s business and government offices.

CIC’s Chinese business automation solutions will combine CIC’s consumer proven, pen-based technology and products with the established IBM AS/400 mid-range computers and existing world-class software solutions, and will be localized to the Chinese environment. Both desktop and mobile pen-based personal computers will be offered as the front end of the systems. Additionally, CIC’s Dynamic Signature Verification software will provide state-of-the-art computer security for the multi-user systems. William Stuek, assistant general manager of marketing for IBM’s $14 billion Ap-plication Business Systems, said “The CIC agreement represents a key example of IBM’s new strategy — to focus on establishing OEM relationships with select companies to develop targeted markets.

“CIC’s Chinese business automation system represents a unique opportunity to maximize the efficiency and productivity of the Chinese computer user. Instead of having to deal with a training intensive and awkward Chinese language keyboard entry system, CIC’s pen-based products allow more natural pen-input and require minimal training.”

In 1992, the International Monetary Fund reported that China grew an astounding 12%. Between 1979 and 1991 the Chinese Gross National Product averaged an 8.6% yearly increase. The economy is being fueled at an increasing rate by significant capital from investors in Japan, Hong Kong, Taiwan and Germany. Foreign trade requirements in China are growing quickly. In 1992 alone, foreign trade amounted to $170 billion. As a result of this rapid growth, China needs to computerize, both immediately and for the future.

Chinese is a non-alphabetic language with thousands of ideographic characters. Data input using a European keyboard is therefore very difficult and requires extensive training. Pen-based computers will be one of the key shortcuts that can eliminate millions of man-years from China’s modernization drive.

Entry into the Chinese market represents a logical extension of CIC’s continuing development of the Pacific Rim marketplace where CIC’s pen-based computing products currently allow for the natural entry of Chinese and Japanese ideographic characters. Today, CIC’s licensees and strategic partners have a combined Japanese PC market share of over 80%. In addition, CIC MacHandwriter is being marketed by Apple Japan.

Communication Intelligence Corp. (CIC) develops, markets, and licenses natural input computer technology — products that use pen, voice, and image for input. Founded in 1981, CIC today is a leading supplier of pen computing products to hardware manufacturers throughout the world, particulary its multilingual Handwriter Recognition System and Handwriter Dynamic Signature Verification software, and PenDOS and PenMac pen operating environments.

CIC’s products allow existing and new pen applications to operate on all major hardware and operating system plat-forms, including: Microsoft Windows for Pen Computing, GO’s PenPoint, and CIC’s own PenDOS and PenMac. CIC’s PenDOW and Handwriter Recognition System for PenDOS are distributed and exclusively sublicensed by IBM to pen computer manufacturers worldwide. CIC’s MacHandwriter, a desktop pen extension to the Macintosh computer, is distributed by Apple Japan Inc.

CIC is headquartered in Redwood Shores, and has a subsidiary in Tokyo.

CONTACT:
CIC, Redwood Shores
Germaine Gioia, 415/802-7754 (Corporate Comm.)
Anne Butler, 415/802-7888 (Investor Relations)