Immersion Investor Update

September 2008

Welcome

Welcome to the inaugural edition of Immersion Investor Update, quarterly news for investors. Our publication schedule will be midway between quarterly conference calls. We hope you find this news informative, and we welcome your comments. Contact us at investors@immersion.com.

Clent Richardson
President, Chief Executive Officer

Stephen Ambler
Vice President, Chief Financial Officer


	In This Issue

	›	Welcome

	›	Medical

	›	Touch Interface Products

	›	Mobility

	›	Gaming

	›	Corporate Developments

	›	Immersion in the News

	›	Investor Events


	Immersion in the News

	*The Value of Haptics* (PDF) a summary of findings from more than 30 studies on the value of haptic feedback in human-computer interaction, is featured in an article on HowStuffWorks.com. "The haptic feedback is a winning feature and we enjoyed the way it ticks off items in a scrolling list, like a big 'Price is Right' wheel ticking by. We liked the quick vibrations for tying and input, and it helped to smooth over the rough surfaces of the slightly unresponsive screen and touch buttons." (From InfoSynchWorld.com review of new Samsung and LG phones). "The Samsung [Tocco] doesn't have real keys, but goes some way towards emulating them by vibrating each time a virtual key is pressed." (From The Times Online) New Webcast Predicts Increased Adoption of Haptics Mobile devices are now the biggest selling consumer electronics products in the world, according to a new webcast from ABI Research. ABI said more than one billion mobile devices are now shipped annually, with new technology helping to expand the market. The firm indicated that user interface advances, such as haptics, will continue to see increased adoption as device manufacturers look to diversify their product and service offerings.


	Investor Events

	Immersion's management team will be on the road meeting with investors over the next several weeks, including: London – Sept 23 Boston – Sept 30 New York – Oct 1 Toronto – Oct 2 San Diego, AeA Classic financial conference – Nov 2-5 Also look for information on the company's Analyst Day, currently planned for the first quarter of 2009. If would you like to arrange a meeting with the company, please contact Stephen Ambler at investors@immersion.com.

Medical

Immersion Medical Expands International Reach

Immersion Medical's international sales and marketing initiatives are gaining significant traction with recent major sales in several regions, including China and India. To manage its growing international sales, marketing, and customer service operations, Immersion Medical has hired David Barkay to serve as vice president and general manager, International. "We are realizing results from our investments in this area, with second quarter growth of 60 percent in our international medical business versus a year ago," noted Clent Richardson, Immersion president and CEO. As part of its expanded global efforts, during the balance of the year Immersion Medical will be participating in 10 international healthcare events including several in China, Japan, Europe and Latin America.

Touch Interface Products

Leading Research Firm Projects Dramatic Growth for Touchscreens

Global revenues from touchscreens are expected to nearly double over the next five years, according to a new report from industry research firm iSuppli Corp. iSuppli estimates that global touchscreen revenues will grow to $6.4 billion by 2013, compared with the current estimated market of $3.4 billion. "This report describes the touchscreen market's bright future, and we are targeting many of the end-user markets where this growth is expected to occur," noted Chuck Joseph, senior vice president and general manager of Immersion's Touch Interface Products group.

Mobility

Mobile Phones with Touch Feedback Surpass 25 Million

More than 25 million mobile phones featuring Immersion's VibeTonz® platform have now been sold worldwide, including more than seven million handsets in the second quarter of 2008 alone. More than 90 different handsets, including the recently introduced and highly popular Sprint Instinct, now offer Immersion's haptic technology.
Read more about recently introduced handsets.

Mobile Handset Industry Report Projects Growth Potential for Haptics

IMS Research projects a greater than 50 percent compounded annual growth rate for haptic-enabled touchscreen mobile handsets. According to the report, by 2012, 61 percent of all touchscreen phones—or an estimated 144 million units—will incorporate haptics technology. The document describes Immersion as the largest provider of haptics technology for mobile handsets.

Gaming

Immersion Haptics Featured in New Logitech® Devices for PLAYSTATION®3 and Wii

Immersion's TouchSense® technology plays a featured role in two recently introduced Logitech devices. They include the Logitech Drive Force Wireless force feedback racing wheel for PLAYSTATION 3 and the Logitech Speed Force Wireless racing wheel—the first force feedback wheel for the popular Wii gaming platform.

Corporate Developments

Immersion Settles Lawsuits

Immersion announced that the company and Microsoft have settled their litigation. Immersion agreed to make a one time payment to Microsoft of $20.75 million. Immersion will be admitted to Microsoft's Certified Partner Program. In addition, the company settled its litigation against Internet Services, LLC (ISLLC) and the companies also amended an existing business agreement under confidential terms. "We are pleased to have resolved these outstanding disputes and to have put this ligation behind us," said Clent Richardson, president and CEO.


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