News release

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Zi takes action to address Bluetooth™ and VoIP investment

Strategic cost-cutting measures taken to align organizational structure with current business opportunities

Calgary, AB (May 17, 2002) - Zi Corporation (NASDAQ: ZICA) (TSE: ZIC), a leading provider of intelligent interface solutions, today announced that it has taken immediate and significant action to address the level of its ongoing investment in Bluetooth™ and Voice over Internet Protocol (VoIP) technology. Today, the Company reduced engineering and other personnel based in Hong Kong with its Zi Services business unit by more than 60 per cent. The reductions affect non-core specialty engineering and administrative staff. This business unit posted a loss of $1.4 million in the first quarter of 2002.

"We see a great deal of potential in Bluetooth™ and VoIP but market take-up has not yet materialized in a significant way. Reducing our personnel in this area enables us to significantly reduce our cash burn while awaiting the market for VoIP to rebound and adoption of Bluetooth™ technology to accelerate." said Michael E. Lobsinger, Chairman and CEO of Zi Corporation.

Zi also announced today that its contract with Cidco Communications Corporation to provide VoIP telephony equipment and design will not proceed. Zi is currently reviewing its options with respect to this matter.

While the markets for Bluetooth™ and VoIP technology and products are expected to grow, the current business climate necessitated this strategic action by Zi and ensures that the Company's resources are better aligned with current market realities.

About Zi Corporation

Zi Corporation is a market-driven technology company delivering intelligent interface solutions to enhance the user experience of wireless and consumer technologies. The company's core technology product, eZiText™ connects people to short messaging, e-mail, e-commerce, Web browsing and similar applications in almost any written language. Zi supports its strategic partners from offices in Calgary, Beijing, Hong Kong, London, San Francisco, Shenzhen and Stockholm. A publicly traded company, Zi Corporation is listed on the NASDAQ National Market (ZICA) and the Toronto Stock Exchange (ZIC).

Certain statements in this press release that involve expectations or intentions (such as those relating to future deployments or planned cooperation) may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The information in this press release is based on Zi Corporation's current expectations and assumptions, and is subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated. Such risks include, among others, general business and economic conditions, competitive actions, continued acceptance of Zi Corporation's products and services and dependence on third party performance as well as the risks and uncertainties referred to in Zi Corporation's 20-F for the most recent calendar year that is filed with the Securities and Exchange Commission. The reader should not place undue reliance on such forward-looking statements. Zi Corporation does not assume any obligation to update such forward-looking statements.

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For more information:

Media Inquiries:
Shawn Kelly
Corporate Communications Manager
Phone: 403 537 9770
skelly@zicorp.com
or
Investor Inquiries:
Dale Kearns
Chief Financial Officer
Phone: 403 233 8875
investor@zicorp.com

www.zicorp.com

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