Gradiente and NeoMagic® Corporation Announce Joint Development Agreement to Bring to Market a Mobile TV Enabled Smart Phone

SANTA CLARA, Calif. and SAO PAULO, Brazil — Gradiente Eletronica S.A., a leading Brazilian consumer electronics manufacturer, and NeoMagic Corporation (Nasdaq: NMGC), a pioneer in developing mobile multimedia solutions, today announced that they have signed a joint development agreement to bring to market a mobile TV enabled smart phone for the ISDB-T/b (Integrated Service Digital Broadcasting Terrestrial/Brazil) standard based on NeoMagic’s MiMagic 8 application processor.

The ISDBT/b standard is supported by the Brazilian government and was launched in December 2007 in Sao Paulo. Other major cities are going live this year, including Rio de Janeiro and Belo Horizante; and it is expected that tens of millions of people in Brazil will be able to receive live mobile television by 2009. The Brazilian market, with more than 100 million cellular subscribers, is the 5th largest mobile handset market in the world; and the addition of the mobile TV feature is expected to see rapid adoption since mobile TV reception is free for the consumer. The free-to-air model, in contrast to the subscription-based model, has shown to be a key contributor to a successful deployment. This deployment success has been experienced in Japan, where in less than 2 years, the attach rate of the mobile TV feature on cellular phones has reached more than 50%.

Gradiente brings more than 40 years of experience producing and marketing televisions, flat panels, LCDs, plasma displays, DVDs, hi-fi systems, home theater equipments, portable audio players and mobile phones. As a major Brazilian consumer electronics brand in both television and cellular markets, Gradiente is an ideal provider for this convergence product.

The MiMagic 8 processor is a cost effective solution that acts, in a single chip, as both the applications processor for the smart phone and the multi-media processor for mobile TV decoding. The solution is based on NeoMagic’s smart phone manufacturing kit demonstrated at CES 2008 and NeoMagic’s ISDB-T reference design developed for the Japanese market. The unique proprietary array processor architecture and leading edge implementation of the multimedia codecs provide very high quality video for both the mobile TV functionality as well as the smart phone multimedia applications. NeoMagic will integrate all the hardware and software required for this mobile TV enabled smart phone and has worked closely with NXP semiconductors who provides the cellular RF/Baseband chip. NeoMagic will be able to leverage NXP’s proven solution and efficient power management to extend the battery life of the smart phone.

The product is targeted for launch in Brazil at the end of 2008.