Ericsson and Red Hat Form Strategic Initiative in Home Communications

Research Triangle Park

United States, August 1, 2000

Ericsson (NASDAQ: ERICY) and Red Hat, Inc. (NASDAQ: RHAT) the leading provider of open source Internet infrastructure solutions, today announced a strategic initiative to jointly develop a new range of consumer products and services for home communications.

International Data Corporation (IDC) research predicts that by 2002, there will be more than 55 million handheld and notebook-style information appliance devices and that by 2005, shipments of these appliances will exceed shipments of PCs. To capitalize on this opportunity, Ericsson and Red Hat will jointly develop consumer products combining existing industry standards such as Java and the latest open source technologies such as Embedded Red Hat Linux. The products will also support existing and evolving standards such as broadband networking and Bluetooth, where Ericsson is a world leader.

The first product from this partnership is the Ericsson Cordless Screen Phone unveiled at CeBIT 2000, that will be commercially available at the end of this year. Additional Internet services are being jointly designed by both companies, specifically targeting operators (telecommunications, Internet and Application Service Providers) that are increasingly looking to offer consumers new, easy-to-use and innovative levels of service. An example is the upgrading of Ericsson's installed base of products which will enable consumers to use the latest applications and content without having to worry about technical complexities.

"This strategic initiative will bring to life the exciting new market for mobile internet devices in the home and is a natural extension of our vision of anywhere, anytime communication," said Björn Krylander, Vice President and General Manager, Ericsson Home Communications. ""Red Hat delivers unique software and expertise in all the areas critical to launch this initiative: the embedded Linux software powering affordable and reliable devices for home communications, the Internet servers powering the back end infrastructure and the networking and communications that ties together thousands of loosely connected mobile devices. We are also excited about the development with Red Hat of new services for these operators. These services will support Ericsson's Vizion program, that will link many wireless and wired devices in an integrated home network"

"Pairing Ericsson's world leadership in communications and Red Hat's unmatched open source expertise can accelerate the adoption of open source solutions in the growing home communications marketspace," said Matthew Szulik, President and CEO of Red Hat, Inc. "The agreement between Ericsson and Red Hat is one of the first of this kind in the industry to provide a comprehensive range of post-PC products and services designed specifically for home communications. Ericsson sees the value in bringing to market innovative products and services that are increasingly based on open platforms and open standards"

As part of this initiative Ericsson will also work with Red Hat to establish open technologies, such as the latest Embedded Red Hat GNU development tools, that will be made freely available to developers through RedHat.com. Both companies believe there is huge market of open source and third party developers, that are waiting to design, port and develop new applications, for innovative Linux based products such as those being developed by Ericsson Home Communications. Ericsson and Red Hat are also jointly establishing new mechanisms, for the creation of web content and certification of applications for these Internet appliances. For operators, this will mean new Linux-based infrastructure technologies and services, that will provide easy to manage upgrades across the Internet. For consumers, this will mean a range of easy to use and fun Home Communications appliances, such as the Cordless Screen Phone designed by Ericsson.

About Ericsson
Ericsson is the leading communications supplier, combining innovation in mobility and Internet in creating the new era of mobile Internet. Ericsson provides total solutions covering everything from systems and applications to mobile phones and other communications tools. With more than 100,000 employees in 140 countries, Ericsson simplifies communications for customers all over the world.

Read more at: www.ericsson.com/pressroom.

About Red Hat, Inc.

Red Hat, the world's leading open source and Linux provider, is headquartered in Raleigh, NC with satellite offices spanning the globe. Red Hat is leading Linux and open source solutions into the mainstream by making high quality, low cost technology accessible. Red Hat provides operating system software along with middleware, applications and management solutions. Red Hat also offers support, training and consulting services to its customers worldwide and through top-tier partnerships. Red Hat's open source strategy offers customers a long term plan for building infrastructures that are based on and leverage open source technologies with focus on security and ease of management. Learn more: http://www.redhat.com

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