For Immediate Release (Calgary, AB Canada)
August 27, 1999   
     
Zi Corporation (TSE: ZIC; NASDAQ: ZICA) ("Zi") Announces Results for the 
Six Months Ended June 30, 1999

		Six Months Ended June 30
		1999	1998
Revenue		$602,650	$1,247,004
Operating Costs and Expenses
	Operating costs	1,861,326	1,038,934
	General and administrative	865,402	749,190
	Depreciation and amortization	513,096	260,939
		3,239,824	2,049,063
Operating loss before undernoted		(2,637,174)	(802,059)
	Interest and other income	17,929	71,562
	Interest expense	(19,836)	(13,589)
Net income (loss)		$(2,639,081)	$(744,086)
Earnings (loss) per share		$ (0.09)	$ (0.026)
Common shares outstanding at end of period (weighted average)		29,329,204	28,267,273

Financial Review
Total revenue for the first six months amounted to $602,650.  Revenues in the comparative period in 1998 are higher because of licensing fees from the Ericsson agreement.  The second quarter revenue is 61% higher than that of the first quarter of 1999.

Operating expenses in the second quarter were 30% higher than the first quarter of the year.  The increase is a result of new hires in the area of sales and marketing as well as travel and legal expenses incurred in the preparation of the various licensing agreements mentioned above.
 

Operations Review
During the second quarter the company was diligently negotiating the final aspects of a number of significant agreements which were ultimately signed and announced in the months of July and August.   Zi has been patiently building a close relationship with the Ministry of Education in the Peoples Republic of China for a number of years.  The value of this relationship is reflected in the agreement reached on July 8, 1999 with China Huayu Development Corporation, a wholly owned subsidiary of the Ministry of Education.  As a result of this relationship, Zi technology will be embedded in numerous products destined for the 975,000 schools to benefit the 240 million students throughout the country.  

Another government related contract was announced on July 26 with the Ministry of Information Industry and its Research Institute of TV and Electro-Acoustics wherein the Zi Input System will be provided on a range of set top box devices to be sold in China and for export in international markets.  The Institute adapts set top box designs to suit specific needs of the Chinese consumer and is currently working with several set top box solutions from leading international semiconductor manufacturers.  

The company also announced licensing agreements with two of China’s largest electronics manufacturing companies, Konka Group Co. Ltd. and Xiamen Overseas Electronics Co. Ltd. which will see our technology embedded into their cell phones, set top boxes and other hand held devices.

In August Ericsson began the launch of its mobile phones that include the Zi Input System.  There will be three models with Zi inside, the T10, T18 and T28.  Sales of the new phone are reported to be very strong across Asia. 
 

Outlook
The Company is in various stages of discussions with numerous potential licensees of the Zi technology located in Asia, North America and Europe. After three years in the making, it is very satisfying to see acceptance of our technology around the world.  We look forward to the launch of a number of products in which the Zi Input System will be embedded within the next six months.  
 

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 
Tel: 403.233.8875 
Web site: http://www.zicorp.com