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Profile

Hauppauge Digital, Inc., through its Hauppauge Computer Works, Inc. subsidiary, has been a leader in bringing TV functionality to the PC since 1992, with an estimated worldwide installed base of almost one million users. The Company is the worldwide leading developer and manufacturer of analog and digital video, TV and data broadcast tuner products for personal computers. These video boards allow PC users to watch television on their PC screens, video conference and create both still video images and digital video movies. Hauppauge’s flagship product, the WinTV family, is the leading branded TV card in the retail market.

WinTV Family

The WinTV family consists of over six high-end to low-end WinTV models that include features from FM Radio to Dolby Surround Sound. All models work with a remote control, with the exception of one. Although each model has distinct features, this family of products shares the same basic functionality. The boards are installed in PC’s to display video in a resizable window. They enhance the usefulness of professional and consumer PC’s by allowing users to watch television, view video images from cameras and video conference through their PC, while simultaneously allowing traditional PC applicants to be run. In addition to allowing PC users to “watch TV on their PC,” the WinTV boards can be used to receive data broadcasts worldwide. Hauppauge Digital, Inc. has been the market leader in bringing TV to the PC since 1992. This focus has enabled the Company to achieve world class know-how and innovation in this market segment. The brand is recognized worldwide and has an industry-wide reputation for quality and reliability.

Growth Strategy

As the convergence of the PC and TV further progresses, Hauppauge continuously demonstrates the fruition of an aggressive marketing plan which sustains the visibility of Hauppauge’s brand name and helps to diversify the Company’s worldwide customer base. Hauppauge’s multi-faceted growth strategy has established the Company’s first-to-market position in the US and Europe with the TV-in-a-PC technology. This strategic positioning provides a solid platform from which management is expanding Hauppauge’s worldwide sales presence, forging strategic relationships with players from a range of exciting business sectors and introducing new digital product lines. The Company is partnered with companies such as Intel and Microsoft. Its sales continue to grow through over 5,000+ worldwide retail outlets, including CompUSA/Computer City, Office Max, Ingram Micro, and Softext, and through a global distribution network including Ingram Micro, Brooke, D&H, Actebis, and Frontline.

Investing in the Furture

Hauppauge’s newest technology and products further drive the Company’s success. The next addition to the WinTV product line, the WinTVD family, will allow the PC user to receive and view Digital Television broadcasts to their desktop computer at a fraction of the cost of a dedicated DTV receiver. In addition, the digital tuner provides tremendous opportunities for Hauppauge in the area of digital data, audio and video broadcasts. The implementation of the FCC’s mandated conversion from analog to digital TV over the next seven years, will provide Hauppauge with new opportunities for growth in an expanding market. Starting in November 1998, DTV programming was being broadcast on 27 stations in the top 10 US television markets, and industry experts predict full US penetration through 1500 additional stations within five years. Another addition to the WinTV family is the new WinTV-Wave model. This broadcast tuner board incorporates Wave System Corp.’s Wave Direct secure client-side E-commerce transaction system. This new model enables users to access and purchase software and data products such as video games, productivity tools, graphics, news music, and on-line publications, in addition to containing the basic features of a WinTV board. Purchases are made with a built-in money chip that provides customers with a convenient, inexpensive and secure tool for accessing and buying a wide range of software and digital content available on the Internet and through cable broadcasts. Hauppauge’s first-to-market position with this product allows the Company to capitalize on the burgeoning, and as of yet untapped, market for micro-transactions through the PC. Hauppauge Digital, Inc. supports its current strategic direction and affirms that this direction will allow the Company to grow in its market segments. The Company believes that the WinTV concept will help move PC’s into the living room, and will play an important role in the convergence of the Personal Computer and Consumer Electronics industries. As the PC becomes one of the most important purchases made in the home today, WinTV and its visibility will increase.

Global Presence

Hauppauge Digital, Inc. is headquartered in Hauppauge, New York and has operating subsidiaries with Hauppauge Computer Works Inc. and Hauppauge Digital Europe Sarl. There are sales offices in California, Germany, London, Paris, The Netherlands, Sweden, Italy, and Singapore.