Medical

Immersion's ability to add touch feedback to medical simulation continues to drive strong interest from hospitals and teaching facilities globally. We recently completed the relocation of our Medical line of business and are now “open for business” from our corporate headquarters in San Jose, CA. The timeline for this transition was managed aggressively and effectively to ensure that we have seamless operations for the critical selling months of the quarter, and we have right-sized the business for its expected revenue trajectory for the balance of 2009.

Danish Study Finds Simulator Training Makes Surgeons Faster and Better

Researchers working with the Copenhagen University Hospital team found that junior doctors in the obstetrics and gynecology department whose traditional training of working alongside doctors was supplemented with seven hours worth of simulator training were twice as fast in completing an operation on a patient. In addition, their procedures ranked higher in quality based on a points system used to judge their work. In an article covering the study, which was published in the British Medical Journal, lead researcher Christian Rifbjerg Larsen commented, “Simulator training should be incorporated into the curriculum for all surgical trainees before they embark on patient procedures. This can potentially improve patient safety and improve operation room efficiency.” (See story on BBC).

Immersion Enters High-Growth Robotic Surgery Market

Immersion recently embarked on a new revenue stream via a worldwide license agreement with MAKO Surgical Corp., a leading innovator in robotically-assisted orthopedic surgery. This partnership constitutes Immersion’s first licensee in the area of surgical robotics and represents the convergence of its Touch and Medical solutions. Worldwide robotic markets amounted to $626.5 million in 2007, reached $1 billion in 2008, and are forecasted to achieve $14 billion by 2014. (Piribo). (See press release).

Medical Simulation Exhibitions

Interest in medical simulation within all parts of the medical community is increasing, and our busy events schedule shows it. Some of the exhibitions we attended in Q2 included the Society of American Gastrointestinal and Endoscopic Surgeons (Phoenix), American College of Obstetricians and Gynecologists (Chicago), and EuroPCR, the official congress of the European Association of Percutaneous Cardiovascular Interventions (Barcelona). In Q3, in addition to meetings in the U.S., we will be exhibiting in Japan, Portugal, Spain, and Taiwan. (See our medical events schedule).

In This Issue

Immersion simulator featured in BBC story on advancements in medical training.

Attendees at SAGES experience the latest advances in technology, realistic 3D models, and haptic force feedback in the LapVR simulator.

Touch

The market for touch-based solutions is growing by leaps and bounds. We project that across our Entertainment, Mobility, Touchscreen and Automotive platforms, the total addressable market will grow from 1.3 billion units in 2008 to roughly 1.9 billion units by 2013. While Mobility represents a significant portion of this opportunity today, the Touch market is a largely untapped area that holds tremendous promise, with products spanning office automation, handheld games, IP phones and machine controls, to name a few. Touchscreens are a key driver in this market and iSuppli projects this segment to grow from 300M units in 2008 to approximately 830 million units by 2013. [iSuppli May 2008]

Wall Street Journal Features The Future of Touch Beyond the iPhone

The next generation of touch technology, now in development, promises to be even more intuitive and user-friendly. Check out what they say about Immersion and the future of touch (read article).

Immersion Unveils Revolutionary Ways to Communicate through Touch at D7 Conference

Immersion made a huge splash at the Wall Street Journal’s recent D: All Things Digital Conference, hosted by Wall Street Journal columnists and All Things Digital executive editors Walt Mossberg and Kara Swisher. At the sold-out, 7th annual event, Immersion’s chief technology officer Christophe Ramstein showed how TouchSense technology transforms touchscreen keyboards into ones that feel like physical keyboards and work as effectively, and demonstrated for the first time a new form of digital interpersonal communication called Immersive Messaging. (See press release). We are very eager and excited to share this revolutionary technology with our current licensees and other potential customers. Check out the video to experience Immersive Messaging for yourself!

LG Cookie with Haptics

The value-priced LG Cookie (KP 500) with haptic feedback, introduced in October, is racking up brisk sales. In Korea, the Cookie was the most popular handset with 100,000 units in accumulated sales as of March 2009 and one-day record sales of 4,500 units. LG has said it will expand the Cookie’s availability from 40 to 60 countries as part of its push to hit 10 million units in sales worldwide. Read more about the delicious Cookie.

Mobile User Experience Conference Discuss Haptics Role in the UX

As a prelude to the May 2009 MEX Conference in London, Immersion’s European director of business development, Terence Warmbier, spoke to MEX Conference founder Marek Pawlowski about touchscreens, haptics, tactile experience, emotional design and the user experience. (See video). This interview relates to the conference session entitled ‘Achieving great tactile experience is a subtle art,‘ which kicked off with a keynote presentation from Immersion’s CTO, Christophe Ramstein.

Coverage from the Interactive Displays 2009 Conference

“…if you used one of the interactive displays here to show a heat map of this industry, it would glow red hot. That’s because touch displays, for years relegated to kiosks and industrial uses, are quickly becoming mainstream.” (See CNET article and video).

The touchscreen market is one driver of haptics adoption and is expected to grow from 300M units in 2008 to approximately 830 million units by 2013.

Christophe with Walt and Kara at All Things Digital (D7) showing off Immersive Messaging.

Clent Richardson on Fox Business unveiling immersive messaging and keyboard with TouchSense technology.

Terence Warmbier of Immersion talks to Marek Pawlowski of MEX.

Copyright © 2009 Immersion Corporation. All rights reserved. Immersion, the Immersion logo, and TouchSense are trademarks of Immersion Corporation in the U.S. and other countries. All other trademarks are the property of their respective owners.

Forward-looking Statements

This investor newsletter contains “forward-looking statements” that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause the results of Immersion Corporation and its consolidated subsidiaries to differ materially from those expressed or implied by such forward-looking statements.

All statements, other than the statements of historical fact, are statements that may be deemed forward-looking statements, including the statement regarding worldwide robotic markets forecasted to achieve $14 billion by 2014, our projection that across our Entertainment, Mobility, Touchscreen and Automotive platforms, the total addressable market will grow from 1.3 billion units in 2008 to roughly 1.9 billion units by 2013, our expectation that the touchscreen segment will grow from 300M units in 2008 to approximately 830 million units by 2013, the statement regarding LG’s intent to expand the Cookie’s availability from 40 to 60 countries and any statement or assumptions underlying any of the foregoing. Immersion’s actual results might differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with our business, which include, but are not limited to, the effects of the current macroeconomic climate, delay in or failure to achieve commercial demand for our products or a delay in or failure to achieve the acceptance of force feedback as a critical user experience.

For a more detailed discussion of these factors, and other factors that could cause actual results to vary materially, interested parties should review the risk factors listed in our most current Form 10-Q, which is on file with the U.S. Securities and Exchange Commission. The forward-looking statements in this press release reflect our beliefs and predictions as of the date of this release. We disclaim any obligation to update these forward-looking statements as a result of financial, business, or any other developments occurring after the date of this release.