For immediate release (Calgary, AB Canada)
July 14, 1999
 

Zi Licenses Chinese and English Smart Text Input Software to Xiamen Overseas Electronic Co., Ltd.

Zi Corporation (NASDAQ: ZICA; TSE: ZIC) ("Zi") is pleased to announce that it has entered into a licensing and royalty agreement with Xiamen Overseas Chinese Electronic Co., Ltd. ("Xoceco") to provide Zi Input software for integration with Xoceco's line-up of GSM digital cellular phones sold in China and export markets.

Industry estimates show the GSM cellphone market in China already is the largest in the world with an estimated 12 million handsets sold in 1998. According to China Telecom, China's mobile phone networks now have 26 million subscribers, a figure that has grown more than 100% per year for the last 7 years. Further growth potential makes this market one of the most attractive consumer electronics arenas over the next 5 years.

Mr. Wang Yu Liang, Vice President of Xoceco, said: "Xoceco has a tradition to satisfy its customers with quality goods and services. Zi's input technology now opens up new opportunities for Xoceco's customers both inside and outside China, and reinforces Xoceco's reputation as the industry's technological leader."

Xoceco Holdings, founded in 1984, is an electronic enterprise, headquartered in the Special Economic Zone of Xiamen, Fujian Province, and currently operates in the following businesses: 1) communication equipment, 2) computer and peripherals, 3) audio and video equipment, and 4) electronic components and printed circuit boards. The product portfolio includes color TV sets and monitors, fax machines, microwave equipment and GSM handsets.

Xoceco Holdings' total capital reached RMB 1,458,909,443 (US$182,363,680) in 1998 with sales of RMB 1,843,382,462.87 (US$230,422,808).  Xoceco was listed on the Shanghai Stock Exchange in February 1995, and has now developed into the biggest enterprise in Xiamen. The company is constantly ranked among China's top 5 market share holders in consumer electronic appliances and it was the first electronics company in China to be granted the ISO9002 certificate.

"This agreement with Xoceco is a key endorsement of Zi's technology in China for the Chinese consumer by an established brand leader" noted Michael E. Lobsinger, Chairman and CEO of Zi Corporation. "With its strong brand awareness and focus on quality, Xoceco is well-placed to win a significant share of the GSM handset market. Xoceco takes the approach that a mass-market product needs a mass-market solution for Chinese and English text input and that's what Zi delivers."

Zi Corporation’s goal is to make modern electronic technology more accessible to people in a way that is consistent with their language and culture.  By connecting technology to language, Zi Corporation brings smart text input to the mass market for devices such as mobile phones, TV set top boxes, computers and information appliances.

Certain statements in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements concerning the anticipated benefits to Zi Corporation of its agreement with Xoceco. The expected inclusion of Zi Input technology in products developed by Xoceco and potential license, royalty and maintenance fee amounts involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of Zi Corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.  Such factors include uncertainties in the ability to successfully collaborate with Xoceco; the ability of Zi Corporation to successfully design, develop, and deliver any application that complies with Xoceco’s specifications and is accepted by Xoceco; the ability of Zi Corporation to successfully meet specific delivery dates set forth by Xoceco;  the ability of Zi Corporation to successfully integrate and maintain compatibility with Xoceco’s technology; possible failure to continue to be selected as the Chinese character-based language enabling technology by Xoceco; the ability of Xoceco to successfully market and distribute any of its products incorporating Zi technology; economic conditions in Asia; the risks of doing business in foreign countries including China; and the risks and uncertainties referred to in Zi Corporation’s Report of Form 20-F for the year ended December 31, 1998 filed with the U.S. Securities and Exchange Commission.  There can be no assurance that Zi Corporation will achieve commercial success through the agreement described herein.

NEITHER THE TORONTO STOCK EXCHANGE NOR NASDAQ HAVE APPROVED OR DISAPPROVED OF THE INFORMATION CONTAINED HEREIN.

FOR FURTHER INFORMATION, PLEASE CONTACT:

Zi Corporation
Manager, Investor/Media Relations
+1 403.233.8875
E-mail: investor@zicorp.com
Web site: http://www.zicorp.com

Xiamen Overseas Electronic Co., Ltd.
Mr. Wang Yu Liang
Vice President
+86 592.602.1089