For Immediate Release (Calgary, AB Canada)
August 26th, 1999

Zi Corporation (TSE: ZIC; NASDAQ: ZICA) (“Zi”) is pleased to announce that it has signed a licensing agreement with Sichuan New Tech Digital Equipment Co. Ltd. (“NTC”) in the People’s Republic of China for use on their Set Top Box products in China.  NTC is a partner of the Research Institute of TV and Electro-Acoustics of the Ministry of Information Industries, a recent licensee of Zi technology. 

“This new licensing contract is a direct benefit of our earlier agreement with the Ministry, commented Antoine Blondeau, Senior Vice President of Marketing and Sales of Zi Corporation.  “The fact that Zi software technology is a recommended component of the Research Institute’s set top box solution is instrumental; when many other set top box manufacturers in China are using the Institute’s reference designs.” 

NTC has led the development of Digital Video Broadcasting products in China, since 1995.  It has taken on the task assigned by the State Technical Supervisory Bureau and the previous Ministry of Television Broadcasting to draw up the standard for China.  NTC is a leader in the research and development of Digital Television products and testing equipment.  These products were awarded top prizes for scientific and technical improvement by several official levels in the State Committee of Science.  As a result of these awards, NTC also won the state patent rights to these technologies. 

NTC has successfully developed and launched a series of Digital Video Broadcasting and Digital Versatile Disk (“DVD”) products including Set Top Boxes.  It has several products in the Chinese set top box market including one based on LSI Logic’s hardware and a new product using IBM’s single-chip set-top box controller.  NTC’s largest customers are Sichuan Television Station and Chengdu Television Station.  There are currently over 5 million cable television subscribers in Sichuan province alone.

“We are looking at selling over 200,000 set top boxes in the Sichuan market by the end of 1999,” commented Mr. Chen Shiping, General Manager of NTC.  “Chinese consumers are looking for a simple user-friendly intuitive input system.  Zi’s easy-to-use Chinese input technology for set top boxes fulfills these requirements and ensures our products are ready for the mass market.  In addition, Zi’s technology has been approved by the Research Institute of TV and Electro-Acoustics, a partner and investor of NTC, and has played an important role in the set top box design standardization in China.”

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 delivers multi-language and smart text input to the mass market for devices such as mobile phones, TV set top boxes, computers and other 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 the licensee (the “Licensee”) described herein.  The expected inclusion of Zi Input technology in products developed by the Licensee and potential revenue therefrom 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 the Licensee; the ability of Zi Corporation to successfully design, develop, and deliver any application that complies with the Licensee‘s specifications and is accepted by the Licensee; the ability of Zi Corporation to successfully meet specific delivery dates set forth by the Licensee; the ability of Zi Corporation to successfully integrate and maintain compatibility with the Licensee’s technology; possible failure to continue to be selected as the text input enabling technology by the Licensee; the ability of the Licensee 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 Form 20-F for the most recent calendar year end as 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/

Sichuan New Tech Digital Equipment Co. Ltd. (NTC) 
Mr. Chen Shiping
General Manager 
+86 28 5150 255