Agere Systems Announces General Availability of a Dual-Mode UMTS/EDGE, W-EDGE Baseband Solution for Mass-Market Multimedia Mobile Phones

JANUARY 24, 2005 -- ALLENTOWN, Pa. -- Agere Systems (NYSE: AGR.A, AGR.B) today announced general availability of its chip set and software solution for mass market, dual-mode UMTS/EDGE multimedia mobile handsets enabling seamless handovers between 3G/UMTS and 2.5G/EDGE networks. Agere’s Sceptre® HPU solution, which sampled to lead customers in July 2004, integrates a dual-mode software core based on a proven and tested GPRS and EDGE protocol stack that has been incorporated into millions of wireless handsets already deployed on the market today. Delivering up to 384 kilobit-per-second (kbps) downloads in 3G/UMTS coverage areas and up to 220 kbps in 2.5G/EDGE coverage areas, Agere’s dual-mode technology provides data transmissions at rates that are seven times faster than most wireline PC dial-up connections. Agere will show the Sceptre HPU solution Feb. 14-17 during the 3GSM World Congress tradeshow in Cannes, France.

Operators are focused on providing consumers with innovative wireless data applications and multimedia services such as real-time audio and video streaming. These new services require higher data bandwidth and capacity, but they also give operators the opportunity to increase their average revenue per user. To support these services, operators are rapidly deploying networks based on two advanced technologies – EDGE and UMTS – with major urban areas earmarked for 3G deployments first. These plans make dual-mode W-EDGE handsets critical for continuous delivery of 3G services and ensuring widespread user acceptance throughout the multiple stages of infrastructure roll-out.

Industry analyst firm Strategy Analytics expects dual-mode UMTS/EDGE handsets to account for 40 percent of the total mobile handset market in 2010.*

Current third-generation devices provide access to 3G services when in range of a UMTS cell site, but drop back to GPRS data rates of around 40 kbps when consumers are outside of 3G/UMTS coverage. Agere’s solution enables handsets to drop back to an EDGE connection of up to 220 kbps, which is important for maintaining the full performance of some 3G services.

“We are sure that dual-mode handsets combining 3G/UMTS and EDGE technologies will be essential in supporting seamless, high-data rate connections for the foreseeable future and we are positioning Agere for leadership in addressing this requirement,” said Luc Seraphin, vice president for Agere’s Mobility Division. “Handsets based on our W-EDGE solution will deliver the full service connections that consumers will expect, wherever they are, even outside of UMTS network range.”

Agere’s three-chip W-EDGE solution is based on its field-proven Sceptre architecture which has been optimized over multiple generations to meet the quality, size and cost requirements of today’s compact handset models. Sceptre HPU’s small footprint is achieved by integrating baseband processing and power management functions. This level of integration also reduces power consumption and facilitates slower clock speeds and reduced current leakage, which lowers power consumption and supports handset talk times of up to 4 hours and standby time of up to 300 hours.

Agere’s dual-mode solution also boasts a unique protocol stack built using the wireless systems expertise Agere has acquired in getting products approved by over 70 operators worldwide. A major focus for Agere’s development efforts has been ensuring that Sceptre HPU works in real-world networks by running field and interoperability tests over wireless infrastructure equipment. These efforts enable Agere to deliver solutions that are operational and quality-tested, which is critical for addressing increasingly shorter handset development cycles. This also allows manufacturers to focus on application and service delivery.

Sceptre HPU is 3GPP release 99-compliant, which is the global standard for 3G/UMTS solutions. It supports the 800/850/1800/2100 MHz frequency bands and offers quad voice codec implementation. The chip set also provides a flexible radio frequency interface that enables handset designers to select open market radio frequency and power amplifier solutions capable of delivering best-in-class performance for their products.

The solution is scalable for a broad range of models within manufacturers’ 3G portfolios, from entry to mid-level and high-end solutions, with proven interfaces designed to work with multimedia extensions and applications processors. Sceptre HPU also includes support for full-duplex speakerphone, MP3 playback, AAC playback, MPEG-4 playback/record and a SD/MMC memory card interface.

Agere expects to deliver the solution in production quantities by the second half of the year.

For more information on Agere’s W-EDGE, EDGE and GPRS baseband solutions and reference platforms, customers may visit Agere's Web site at www.agere.com or contact one of Agere's regional sales offices. Customers in the U.S. may also call the Agere Systems Customer Response Center at 1-800-372-2447. Customers in Canada may call 1-800-553-2448. Customers outside those countries may call 1-610-712-4323. Fax inquiries may be directed to 1-610-712-4106. Written inquiries should be sent to Agere Systems, Room 10A-301C, 1110 American Parkway NE, Lehigh Valley Central Campus, Allentown, PA, 18109, USA.

Agere Systems is a global leader in semiconductors for storage, wireless data, and public and enterprise networks. The company's chips and software power a broad range of computing and communications applications, from cell phones, PCs, PDAs, hard disk drives and gaming devices to the world's most sophisticated wireless and wireline networks. Agere's customers include top manufacturers of consumer electronics, communications and computing equipment. Agere's products connect people to information and entertainment at home, at work and on the road -- enabling the connected lifestyle.

* Strategy Analytics: Global Cellular Handset Market Forecast Update - December 2004

Agere and Sceptre are registered trademarks, and Agere Systems and the Agere Systems logo are trademarks of Agere Systems Inc.

This release contains forward-looking statements based on information currently available to Agere. Agere's actual results could differ materially from the results stated or implied by those forward-looking statements due to a number of risks and uncertainties. These risks and uncertainties include, but are not limited to, our reliance on major customers and suppliers, our ability to keep pace with technological change, our dependence on new product development, price and product competition, availability of manufacturing capacity, customer demand for our products and services, and general industry and market conditions. For a further discussion of these and other risks and uncertainties, see our annual report on Form 10-K for the fiscal year ended September 30, 2004. Agere disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.