Agenda

1. USRobotics Voice over the Internet – USB Telephone Adapter“Make and receive Skype calls using your existing telephone!”

2. Agenda • The Skype™ Voice over the Internet Application • USRobotics Telephone Adapter • Who will use it (buy it) • Industry trends • Other Skype compatible solutions • USRobotics USB Internet Speakerphone • USB Internet Phone

3. What is ? What is it?

4. Skype Software/Service - What is it? • A simple Instant Messaging tool • With multi-party messaging & quick file transfer • Without application-sharing like MSN Messenger • A simple, high-quality voice communication tool • IM-like Point-and-click call/answer • Limited but simple call management: Conference call, busy, voicemail • Convenient – See who’s available • Best-in-Class voice quality • A community & lifestyle • Users do the marketing • NO subscription, NO contract, NO money to Start • And the cheapest rates around for PSTN

5. Skype Software/Service - What is it? • Skype is a form of Voice over Internet Protocol (VoIP): • Has a signaling protocol - call, answer, hold, conference call, etc. • Has a transport protocol - digitize and send voice over the Internet • BUT it is not standards-based – Internet calling is Skype-to-Skype or Skype-Out service to other phone numbers • Skype provides PC application • No provisioning is needed • Versus Conventional VoIP operators, who • Provide Infrastructure • Purchase standards-based equipment (softswitches, VoIP routers) • Standards allow them to mix equipment vendors . . . In theory • Tier1 operators (Telcos/PTTs) can provide phone-like service • No regulatory barriers to providing Internet-to-Internet calling

6. Skype is recognized! • ZDNet Research – January 2006Google, Apple, Skype, Starbucks, Ikea, Nokia, Yahoo!, Firefox, eBay and Sony were named the top global brands in 2005 annual survey by brandchannel.com. • Wainhouse Research - November 2005In the latest report from Wainhouse Research's quarterly WebMetrics research program, 70% of panelists who used Skype in the last six months found the VoIP service acceptable for business calls. • Sandvine Inc. – August 2005With over 1,100 VoIP providers identified, Skype takes the lead and garners an astounding 35.8% of all VoIP calls in the US. Skype takes an even more commanding lead of 46.2% when it comes to share of minutes, suggesting that Skype users are also making longer calls. Other PC-based VoIP services like Microsoft, Yahoo and AOL chat are distant seconds. • CNET Editors’ Choice February 2005. Skype 1.1 has been named CNET Editors’ Choice by the CNET Product Reviews Team; awarded to products that display excellence in performance, quality, product design, and value. • TIMES ONLINE Doors Award. SkypeOut is “This year’s notable telephonic improvement” and awarded the ‘Look, No Phone’-Award. • TMC Internet Telephony VoIP Service Provider Award. Winner of VoIP Service Provider Award by TMC’s INTERNET TELEPHONY Magazine. • In the Top 100 private companies in the IP Communications Industry to watch in 2005.

7. USRobotics USB Telephone Adapter

8. The USRobotics USB Telephone Adapter is . . . • Skype™ Certified solution that is an easy way to integrate Skype calling with POTS phone calls • A full-featured voice communications option which includes: • Skype Call Forwarding − Reduce missed calls by forwarding Skype calls to your mobile phone • Advanced Call Waiting − Notification of incoming calls, Skype or PSTN, and the ability to switch between them • Toll Bypass − Make Skype calls from your mobile phone, bypassing long-distance or international charges • Conference Calling − Conduct 3-way conferences between Skype calls and regular telephone calls • Caller ID − Displays Skype user name or PSTN Caller ID* • An incredibly flexible solution for FREE Internet calling with high quality audio, providing improved call quality when compared to PC sound-card options • Includes integrated echo cancellation, advanced audio compression and powerful signal processing *PSTN Caller ID requires service from the PTT/Telco

9. USR9620 Capabilities • Makes Skype to Skype calls

10. USR9620 Capabilities • Makes Landline to Landline (POTS to POTS) Calls

11. USR9620 Capabilities • Call Waiting - Switches between Landline (POTS) and Skype Calls

12. USR9620 Capabilities • Conference Landline (POTS) and Skype Calls

13. USR9620 Capabilities • Forward your Skype Calls to a predetermined number • Skype calls can always reach you

14. USR9620 Capabilities • Bypass LD/International LD using local call plus Skype

15. USR9620 Capabilities • Bypass LD/International LD using Skype to dial through your home or office • USB Telephone Adapter acts as you personal “operator” assistant

16. How the USRobotics USB Telephone Adapter Works • The USB Telephone Adapter connects to both your standard telephone line and, via a USB connection, to a computer with a broadband Internet connection • A second telephone port allows connection to a standard (or cordless) telephone • In a cordless environment all phones in this cluster would have access to Skype calling as well as normal telephone calling

17. Who will use it? • Target Markets

18. USB Telephone AdapterWho is the target? • International families • Living apart • College students • Business travelers • Small businesses

19. USB Telephone AdapterWho is the target? Current Skype Customer • Skype Savvy • Currently uses Skype and: • Wants to improve quality of phone calls (reduce echo, improve sound quality) • Wants a more traditional call feel (i.e. handset rather than PC microphones or headsets) • Wants to expand Skype calling throughout the home (using a cordless phone) • Wants to never miss a Skype call because they aren’t near their computer • International call characteristics • Uses pre-paid calling cards • Calls overseas often • Is driven to reduce calling charges • Business to business users • Needs low cost telephony solution • Holds meeting with vendors over Skype • Skype customers typically use Skype calling as an adjunct or addition to their traditional telephone service, unlike Vonage type customers • Emergency service (eg. 911 in the US) is not an issue

20. Voice over the Internet - Industry Trends Skype Market

21. VoIP in general, and Skype specifically, represent “disrupting” technologies for traditional phone companies • “I knew it was over when I downloaded Skype. When the inventors of KaZaA are distributing for free a little program that you can use to talk to anybody else, and the quality is fantastic, and it’s free – it’s over. The world will change now inevitably.” Michael Powell, Former FCC Chairman • “The idea of charging for calls belongs to the last century. Skype software gives people new power to affordably stay in touch with their friends and family by taking advantage of their technology and connectivity investments.” Niklas Zennström, CEO & Co-founder of Skype

22. Leading research organizations expect Voice on the Internet to rapidly expand in businesses and homes • Info-Tech ResearchThe rapid adoption of Voice over IP (VoIP) is killing off traditional telephony, with 50 percent of small- to mid-sized enterprises expected to rely on VoIP by 2008 . . . study found that 23 percent of small- to mid-sized enterprises are already using VoIP technology. • IDC Fueled in part by consumers looking to add value to their telephony service, IDC expects that the number of U.S. subscribers to residential VoIP services will grow from 3 million in 2005 to 27 million by the end of 2009. • Insight Research . . . the global market for VoIP will reach $82 billion in 2005 and $196.5 billion by 2007. Much of this growth is driven by businesses, but Gartner predicts that by 2008, almost 20% of US homes will have VoIP telephones. • Light Reading – Article from June 2005Calls using Skype Technologies SA account for nearly half of the VoIP minutes used (46.2 percent) and about 40 percent of the VoIP bandwidth used in North America, according to an analysis done by broadband management company Sandvine

23. Skype communications is booming! Skype Subscriber Growth • Over 1 million new users per week • Over 3.5 million simultaneous users during peak hours • 57M registered users as of the end of Q3 05 • USR participates in five of Skype’s top nine markets • These five markets alone account for 14.5M out of 26M registered users Source: MorganStanley

24. Additional USRobotics Skype “Voice over the Internet” Appliances USB Internet Speakerphone USB Internet Phone

25. USRobotics Skype Appliances • Designed to provide users with an interface for Internet calls that compares favorably to using standard telephones • Include integrated audio technology that eliminates echo and voice clipping, providing excellent call quality • Enhance the quality and value of making free calls all over the world • Stimulate new Skype users, while providing enhanced Internet call quality to 75 Million existing Skype users

26. USRobotics USB Internet Speakerphone – USR9610 • The USB Speakerphone attaches to a computer’s USB 1.1 or 2.0 port and allows hands-free conversation using the Skype voice communications application • Available volume controls allow users to adjust conversation volume • Integrated head-set plug allows users to attached a head-set for conversation privacy • All you need is a PC, broadband connection and the Skype™ client software

27. The USRobotics USB Internet Speakerphone is . . . • Skype Certified to assure maximum compatibility • A sleek device that delivers high-quality voice reproduction • Very compact and durable to safely and easily carry on business trips and/or vacations • Universal support – “just plug into to a PC with broadband and talk” • USB port powered – No need to carry along an extra power supply • A high quality audio device delivering improved call quality when compared to typical PC sound-card options • Advanced echo cancellation and noise reduction technology provide excellent call quality • High-fidelity speaker

28. USRobotics USB Internet Phone – USR9600 • The USB Internet Phone plugs into a computer’s USB 1.1 or 2.0 port and allows people to talk over the Internet for free! • Utilizes Skype API to work with Skype communication software • All you need is a PC, broadband connection and the Skype™ client software • USB Phone can also support additional phone-like services from MSN, AOL, Yahoo etc.

29. The USRobotics USB Internet Phone is . . . • An attractive handset familiar in design to everyone • Designed to be compact for easily packing on business trips • Universal support – “just plug into to a PC with broadband and talk” • A natural, “regular phone”, for use with PC technology • Dial from phone, not PC • By entering a speed dial (i.e. - 08) for a friend or family member, just dial the digits on the phone’s key pad • LCD Display also shows “Skype” caller id, call status, time and phone status • Rings just like a normal phone and supports personalized ring tones • A high quality audio device delivering improved call quality when compared to typical PC sound-card options

30. Skype Internet Voice CommunicationsHow does it work? FREE!

31. Skype Internet Voice Communications How does it work? • Start dialer • Start dialer • Start dialer

32. Skype Internet Voice Communications How does it work? • Select person to call & dial (using phone or application) • Select person to call & dial (using Skype application) • Select person to call & dial (using phone or application) • Also, using Skype or standard phone line

33. Skype Internet Voice Communications How does it work? • Talk for Free! • Talk for Free! • Talk for Free!

35. Background information – Competitive Glance • Direct competitor DLink’s feature set is identical to ours • USR and DLink are the only full featured Skype Certified solutions found (there could of course be more) • The real opportunity for us is to be first to get mass-market traction . . . There is no leader now • Conversation regarding competition should focus on standalone Skype Cordless solutions versus our TA plus an end-users existing cordless phone • NOTE: The TAs shown in the chart were found doing web searches