Speech Recognition Consumer Products Hit it Big in 2005

SUNNYVALE, Calif.--Dec. 15, 2005--Sensory, Inc., the world leader in embedded speech technologies, today announced that in 2005 the company achieved record revenues and profits due to its customers' success in releasing speech enabled products, with revenues increasing 70% over the preceding year. Customers such as Radica Games , Hasbro, Inc.'s Tiger Electronics and Innotech Systems have contributed to this outstanding year. "We are ecstatic to have so many customers flourishing in the marketplace," said Todd Mozer, Chairman and CEO of Sensory. "Thanks to their efforts Sensory has had an outstanding year, enabling us to fund many exciting new speech related R&D projects for the years to come."

Market Dynamics Show Trends for High Tech and Speech Recognition Consumer Electronics

The hot items on every kid's Christmas list this year are products like iPods and cell phones, products not designed primarily for children and certainly not priced for them. This phenomenon is called "age compression," where kids are more familiar with computers than many adults and are showing increasingly sophisticated tastes in toys. In an effort to stem this effect, many manufacturers are blurring the line between toys and consumer goods by integrating hi-tech features like speech and animatronics. In the February 17th online issue of the New York Times, David Riley of the NPD Group, a market research firm based in New York, said the shift is part of an effort by the $20 billion toy industry to reclaim dollars lost in recent years to high-tech products designed mostly for adults yet increasingly coveted by children.

Radica Games has taken this approach with its Girl Tech(R) Password Journal(R), featuring a Sensory IC for speaker verification. According to Chief Executive Officer Pat Feely, "(Q3) was the highest level of sales in any quarter ever at Radica, and our earnings were strong as well, with an operating margin over 18%...It demonstrates that our strategy of focusing on electronic entertainment for casual gamers is the right strategy for today's tech-savvy consumers." Earlier this year, Mr. Feely was quoted on Forbes.com regarding Radica's financial performance, "Of particular note is the strength we are seeing from our newly introduced fourth version of the Girl Tech Password Journal."

For the aging baby-boomers, the need for easier-to-use products is helping to drive demand for more speech I/O enabled interactions. This market segment has embraced products that don't require manual dexterity or good vision. Voice controlled home electronics, such as clocks, lighting and remote controls have taken off in the last several years.

Products Featuring Sensory ICs Winning Sales Accolades

Over the past six years, Toy Wishes magazine has accurately predicted the best-selling and most popular toys of the year, from the more than 150,000 toys on the market at any given time. One of this year's Hot Dozen Picks includes the former 1999 and 2000 Toy of The Year, Furby from Hasbro's Tiger Electronics. He's back and more fun than ever thanks to an advanced technology called "emoto-tronics." Sensory's RSC-4128 IC provides the "brains" for motor controls and voice recognition and synthesis, so Furby can communicate in his own language -- "Furbish" -- or in one of seven international languages while using facial expressions and synchronized body motions to display his emotions.

According to the December 3rd, 2005 online issue of Australia's Sydney World Herald, "Barbie has lost her crown to Amazing Amanda, a doll with the ultimate accessory -- an electronic brain." Making the top ten lists for Christmas gifts from retailers like Woolworths and Hamsleys in the UK, as well as Wired Magazine's Top 100+ technophile's holiday wish list, Amazing Amanda is another product powered by Sensory's RSC-4128 IC. Playmates Holdings Limited (HKEx Stock Code: 635), parent company of Playmates Toys and makers of the doll, stated in their August 29th press release that "Amanda is the most technologically sophisticated and truly interactive doll and will add never before seen dimension to the traditional nurturing and caring play pattern. Amanda employs speaker independent voice recognition, lifelike animatronics and smart accessory recognition to create a new, magical play experience for little girls." Playmates sales were up over 6% from last year, despite a 6% downturn in the U.S. toy market according to the company's release.

The Wall Street Journal recently proclaimed that the FamilyFun T.O.Y. Awards are "as coveted in the toy industry as the Oscar is in Hollywood." This competition relies on kid testers and an independent research firm to sift through the more than 500 toys submitted by nearly 200 companies to come up with the 21 best toys of the year. FURREAL FRIENDS SCAMPS: MY PLAYFUL PUP, from Hasbro's Tiger Electronics, features an RSC-4128 and was voted the favorite playmate for children aged 5-7. Requiring no training, Scamps comes out of the package knowing seven commands. And unlike the family dog, he'll actually listen -- literally sitting and speaking on command.

Other consumer electronic companies like HOT from Taiwan, CyberWorkshops from Hong Kong, and Innotech in the US are seeing success designing household products featuring speech recognition. Speech-enabled remote controls, messaging systems, and clocks are selling well, and aggressive new products featuring Sensory's speech technologies are in the works. According to Len Novara, CEO of Innotech Systems, "Our first generation InVoca universal remote control has been a big success, selling many hundreds of thousands of units. We are now working on a line of products and enhanced universal remotes with the Sensory processors because we see the market for speech recognition consumer electronics really starting to open up."

RSC Processor & Tools Provide Keys to Success with Speech Recognition

Sensory's strategy is to offer industry-best embedded speech technologies at the lowest cost possible. This gives any consumer product, regardless of price or complexity, the potential to speak and hear. Sensory offers multiple options for introducing speech into consumer goods, from software-only solutions to a variety of integrated circuits. For mass production and access to all of Sensory's world-class speech technologies, the RSC-4128 IC is available in die and package form and is supported by a full suite of development tools including Sensory's patented Quick T2SI(TM) technology.

For smaller scale projects, Sensory offers the VR Stamp(TM) Toolkit, which features an RSC-4128 chip that has been embedded onto an industry standard 40-pin DIP footprint module. Available online at retail outlets such as DigiKey (www.digikey.com), the VR Stamp Toolkit includes everything necessary to complete a basic speech recognition project for prototyping or production. Sensory also offers the SC-series of speech controllers for low-cost, synthesis-only applications.

About Sensory, Inc.

Sensory, Inc., (www.sensoryinc.com) based in Sunnyvale, CA, is the world leader in embedded speech technologies. Sensory is a profitable private company offering a complete line of IC and software-only solutions for speech recognition, speech synthesis, speaker verification, music synthesis and more. The company's products are widely deployed in consumer electronics applications including telephones, home automation, toys, remote controls, automotive, security, and learning aids. Sensory's customers represent the leaders in consumer electronics, including such companies as Hasbro, JVC, Kenwood, Mattel, Mitsubishi, Toshiba, Uniden and Sony. Additional Sensory offices are located in Portland, Hong Kong, Tokyo and Vienna.