Caught up in this tempest of change, some world-class companies of the past have met their demise by neglecting technological innovation and failing to adapt to shifting market environments. The wireless handset market is a fierce battleground for survival where stagnant performance spells downfall.

Curitel is determined to survive intense global competition and come out as a winner through a prudent yet rapid decision-making process, sound investment choices and cohesive business performances.

2004 proved to be a difficult year for the domestic market amid business suspension penalties on every mobile carrier and severe economic recession. Adding to the difficulties were the depreciating US dollar, intensified price competition and deterioration of other external factors.

Despite the adverse market conditions, Curitel's sales in 2004 soared 43% from the previous year to post KRW2,024 billion, solidifying its leading position in the global market.
In the domestic market, we raised our profile from an 11% market share in 2003 to 15% last year through an aggressive brand marketing strategy coupled with the supply of strategic products to wireless telecommunications operators. The significant improvement in brand recognition also helped to strengthen our market position.

We also made great strides particularly in the field of new technology with the launching of Korea's first two mega-pixel camera phone with optical zoom lens and the world's first 3-Mega CMOS camera module. These innovative products secured our technological supremacy in the domestic market, which is a test bed for global mobile phone technology.

In the overseas market, we displayed our technological prowess to the world with the introduction of the first mega-pixel camera phone in the North American market. We were also able to successfully forge an alliance with Sprint PCS, the second largest CDMA provider in that market.
We are also enjoying a steady growth in sales by providing secure delivery of handsets to Verizon Wireless the largest wireless carrier in the US. Buoyed by our success in the North American market, we were able to diversify our market to other regions such as Australia, New Zealand and Israel.

One of last year's greatest achievements was expanding our market control in the key market of North America by signing a contract to supply ten million units to UTSI and expanding our CDMA market share to 11%. This enabled us to record exports of KRW1,259 billion last year, representing a growth of 44% YoY, outperforming the industry average growth rate of 25%.

We are confident Curitel's distinctive competitive advantages are the backbone of our amazing growth. Although we are not as large in size as our competitors, we are gaining global recognition as a robust, flexible and 'tenacious' company, armed with advanced technology, a speedy response system and exciting corporate culture.

2005 will be the year in which Curitel launches new initiatives in brand marketing and expands supplies of brand-name products to the North American market. We plan to branch out to the world on the foundation of our experience and know-how accumulated over the years in the market. Our strategy is to promote Curitel's own technology and brand image rather than adhering to the existing ODM business. For this purpose, we plan to set up six North American branch offices in Toronto, Canada as well as Seattle, Atlanta, New Jersey, Miami and Kansas City in the US, in addition to the US headquarter in Cyprus, near Los Angeles. Moreover, we will continue the valued partnership with our established customers by maintaining stable business alliances and manage risks. Furthermore, we plan to explore brand- business opportunities.

In an effort to reposition ourselves as a leader in the ubiquitous age where everything will be integrated into a mobile phone, Curitel's goal is to make 2005 the banner year in entering the European market by introducing third generation WCDMA mobile handsets. We are conducting meetings with major European service providers and manufacturers and anticipate a successful outcome in the near future.

Curitel's soft-landing in the European market would ensure our emergence as a global leader in the handset market. Furthermore, we are executing an active brand marketing strategy targeting the Indian market, which is surfacing as the largest market after China. We also have our eyes on penetrating the Central and South American market starting with Brazil. In the domestic market, we will reinforce our position in terms of market share through the introduction of a wide range of functional products with unique designs and a dramatic increase in user-friendly features.



Curitel is a young and vibrant company. Our corporate culture does not tolerate rigidity or the close-mindedness that is inherent in larger firms. We welcome challenges. Our tireless spirit and foresight have enabled us to achieve explosive growth in just a short period of time. Although the current business climate is far from favorable, we will use the opportunity to triumph as an undeniable market force.

We at Curitel will not be satisfied with achievements of the past. 2005 will be the year in which we make a giant leap forward to emerge as the undisputable market leader by displaying our capabilities to survive in the time of crisis.

Enriching lives with mobile technology; this is the future we envision with you.
Thank you for your invaluable encouragement and faith in us. We are committed to rewarding your support with outstanding performance in 2005 and beyond.

Sincerely,