www.cowon.com www.iAUDIO.com www.jetaudio.com Stock #: 056000

Chapter 1.

Introduction

2

Incorporation 1995 April

President Nam Kyu Park

Capital 2,695 MW

CoreConfidence

Digital Audio Technology

Business Area

MP3 PlayerWireless InternetMuitimedia S/W

Employee 133 (R&D 65)

Address Seoul, Koreawww.cowon.com

Affiliate company

JetAudio, Inc. US, CA. IrvineCowon 100% Ownership

Listed date July 11th, 2003

Overview

Overview

Value

Concord Customer Challenge Creativity Confidence Contribution

No.of Shares

5,391,000

par value KRW 500

Stock option

0

Capital KRW 2,695M

Vision

Core Confidence

“Digital Audio”(iAUDIO.com)Software

(Multimedia)

Hardware(MP3 Player)

WirelessInternet

(Contents)

“ Global Multimedia Total Solution Company ”

3 Business Area Synergy EffectBuild up community for Service, Sales, Advertise in iAUDIO.com

Shareholders

Shareholders’ Ratio

18.43%

Others

23.67%

Board of Director 53.63%

1year lock-up 57.90%

23.67%

Lock Up

Bokwang 4.65%

Employees 7.49%

Employees 4.27%

In IPO program

SKT 6.29%

1995.04

1995.05

1996.01

1998.08

1999.05

1999.08

1999.10

2000.08

2001.04

2003.07

Established

Launched voice software ; Jet-talk, jet-voice, voice-wizard

Launched multimedia S/W ; Jet-audio

Established R&D center

MP3 Player

Wireless Internet Business

Funding from Bokwang Venture Capital

Funding from SK Telecom

Established JetAudio, Inc. in US

Listed in KOSDAQ

Principal History

Sales by Business part

15

10

0.5

FY 00 FY01 FY02 FY03

2.52.7 1.80.5

0.6

Wireless internet

MP3 Player

4.2

4.2

12.2

0.4

20

25

30

3.8

8.5

16.8

FY04 (P)

61

25

86

7

S/W

<Unit: Billion KRW>

9.0

17

0.4

26.4

FY03 Actual/ FY04 Estimation (Unit:Bill, KRW

)FY03 FY04(E) Q1 Q2 1H

MP3 Player

Sales 16.4 61.0 7.2 22.0 29.2

Oper. 1.6 9.1 0.2 2.2 2.4

10% 15% - 10% 8%

WirelessInternet

Sales 9.0 25.0 9.5 6.0 15.5

Oper. 1.4 5.0 1.8 1.2 3.0

15% 20% 19% 20% 20%

Other Sales 1.0

Oper. 0.05

5%

Total

Sales 26.4 86.0 16.7 28.0 46.6

Oper. 3.3 14.1 2.0 3.4 5.4

Recurring

3.4 14.2 2.2 3.6 5.8

Net P. 3.0 12.0 2.0 3.1 5.1

11.4% 14.0% 12.5% 11% 11.6%

8

Chapter 3.

Business parts

• MP3 Player- iAUDIO

• Wireless Internet

10

• Honors

- The World best MP3P by US Amazon.com users

- The World best MP3P by CNet experts

- The Korea best MP3P by PC-line magazine

- The Korea best MP3P by the electric newspaper

The proven Worldwide

#1 MP3P By US users & experts

MP3 Player- Competitiveness

Amazon.com No1 MP3Player for the last 1 year by

customers evaluation

11

Quality competency #1 in 2003

MP3Player

12

iAUDIO-4

MP3 Player – New Products Line-Up

• iAUDIO 4

- JetEffect (Exlusive BBE Sound )

- Wide LCD

- 124 Color LED

• M3 - $340 (retail price)

- 20G HDD

- Slim Design

- Remote LCD

- Launching March 19th, 2004

13

MP3 Player- Marketing Strategy

14

•To Build Up Brand Power

- To Intensify Brand Marketing by utilizing domestic infrastructure

• To Diversify Product Portfolio

- To cover wide range of market sectors (including HDD Type market)

- To launch two more models in this year (Oct. and Nov.)

• To increase overseas market

- To launch several products in major markets (Korea, US, China)

- To penetrate new market (Middle East, East Europe)

• To increase production capacity

- To set up Assembly lines in short term

- To produce goods in China in long term when production exceed 60K/Month

• To put products in right position

- To position new products as High-end products continuously

- To cover low/mid-end market with old models with competitive price

Region Mktg Strategy & VolumeReg Strategy Voulme Sales

Korea •Sound quality #1•Major 3 companies•Target M/S 15%

122,000 26.5

USA •On-line Marketing •New model for Super store ( May 2004)•HDD 타입 출시

35,000 6.0

Europ • Set up Distribution line by country• Co-marketing 30,000 6.0

ChinaHK

•Stable sales supply contract•Increase advertising expense by dealer 100,000 18.5

Other •East Asia, others US army AAFES 23,000 4.

Total 310,000 61.0

15

MP3 Player – Q & AConvergence

Digital camera- high end market increasing

Phone battery using time

Sound quality

Phone : size up, price up,

Opportunity of reverse convergence to add communication chip

Samsung, LG, Sony

They are being in the market from 2000

Sony has 10 model now!. What!

Flash Memory : NO deep impact, price down in long term

Copyright !

: Opportunity !

16

Wireless Internet-Sales flowContents Special Ring , Ring-back tone service, June, Game

ContentsContents

Plan

& converse

Service

& Marketing

Copyrighter

Customer

Profit Sharing Structure

45% 45% 10%

* Cowon’s sales revenue : 90%

Cowon Carrier

Wireless Internet

Contents service

• Digital audio contents

Bell sound, ring-back-tone service

live-bell, music on demand

• Digital video contents

Music video, live-screen, VOD

• Game

Casino land, Nemologic, vocabulary-wizard

Wireless Internet-Competition

MobileMobileServerServerSolutionSolutionContents (Multimedia)Contents (Multimedia)

Server Network SetupTechnology for Mobile

Mobile Solution & Application

Development Technolgy

Contents (Multimedia Contents) Edit and Work Technology

for Mobile

Total Mobile Business

• Made an Strategic Alliance with SKT (SKT invested in COWON in August 2000).

•Started business with an inception of wireless Internet in Korea

• Powerful human resources keeping many top trained engineers

• To maintain information channels for new technology and trend

• To perform reliable after service and adapt new technology and contents

• To have strong partnerships with over 100 music agencies and label companies

• To run multimedia contents Data Base

• To play a role as a leading company in June multimedia service

• To focus on multimedia solution and contents for EV-DO, IMT2000

• Selected the best CP and best partner by SKT

Wireless Internet – Marketing Strategy Prior Occupation Maximum Strategy

Prior Occupation of Contents by developing many contents

on short-time base

Differentiation by various & many contents supply

Nation Policy Benefit Maximum Strategy

Possible to use various Nation Support benefit as a Digital Contents Part selected one of core business categories (10 categories)

Co-Brand Effect

Full-Scale Drive of Overseas Market

Personal Link Back Tone Service supplied to Thailand Communication Service Corp as a consortium (6,000,000 ~ 7,000,000 subscriber)

Entry strengthening of Other East Asian countries

Strong Drive to enter on European countries

Active motion planning on KTF & LGT

20

Wireless Internet – Q & A Motivation to launch the Wireless Internet

Voice recognition CTI Server supplied to SKT on 1998.

Strategic Investment hosted by SKT on 2000.

Planning, R&D and Server management launched

from nTOP initial step

From June launching, serviced as a Pilot corp.(COWON & W corp.)

Low entrance barrier

Entrance barrier is very low (low percentage to succeed when entered)

Prior occupation effect

Possible to supply all of contents by strategic relationship

Possibility of network alteration regarding profit distribution

Guideline presented currently by Ministery of Information&Communication

Possibility to go low regarding profit ratio of Communication Service Corp.

Network opening

Suitable phone release of network opening & purchase of end-consumer

Prior occupation effect(Menu setup on Phone) : Royalty charged

on Consumer 21

Investment Points

Fast growing company #47 in Asia by Deloitte Touche Tohmatsue

Being in the growing industry (MP3P &Wireless internet)

Having Core confidence- digital audio technology

Completing the setting distribution lines

Announcing monthly sales

22

Risks

Advertising cost

FX rate

Appendix

24

Profit & Loss Per Each business field(I)

99 00 01 02

MP3 Player Sales 1 560 1,780 11,196

Net Profit 55 242 2,053

Net Profit Ratio 10% 14% 18%

Wireless Inernet

Sales 107 459 1,806 4,182

Net Profit 20 108 292 1,129

Net Profit Ratio 19% 24% 16% 27%

Software Sales 1,301 2,770 2,440 385

Net Profit 448 1,068 1,172 369

Net Profit Ratio 34% 39% 48% 96%

Others(XingQ

Unit Sales)

Sales 1 13 2,429 1,048

Net Profit 2 73 30

Net Profit Ratio 15% 3% 3%

Total Sales 1,410 3,802 8,454 16,811

Net Profit 468 1,233 1,779 3,581

Net Profit Ratio 33% 32% 21% 21%

- MP3 Player sales & Steady increase of Profit Ratio- Dramatic increase of Wireless internet sales (Base: Mil)

27

Wireless Internet-Monthly Sales Amount

0

0.2

0.4

0.6

0.8

1

1.2

1.4Billion KRW

Year 2002 Year 2003

Continuous Sale Growth

Organization structure

Stockholders

President

V.President

Wireless Internet Div. (37)

New business div. (5)

MP3 Player Div. (60)

Sales & Marketing-A/S (21)

Finance & Administration : IR (6)

Strategy & PR (2) JetAudio, Inc.

(8)

President Park Namkyu• Seoul National University

• Seoul National University

- MS

• LG Electric Co.

• Establisher of COWON

Vice President M.Y. Lee

• Seoul National University

• Seoul National University- MS

• Samsung Electric Co

Auditor JW Choi

• Seoul National University

• Michigan State Univ.- MBA

•PerreGreen Security Co.

•IMM Venture

Jetaudio - Multimedia S/W Product

• Audio/Video total solution

• Internet broadcasting function

• Able to mp3PRO, OGG, Divx, DVD format

Competitor: Winamp, MediaPlayer

Honors

• 99’ SoftExpo Champion

•, The most popular S/W 20 in Cnet and ZDNet

• 02’ The world-class product of Korea

Marketing Strategy

• To focus on high quality of the product by utilizing accumulated world-class R&D ability

-> To widen market into B2B bundle business (Major reference customers - NEC, Fujitsu, IBM, Gateway)

• To manipulate existing worldwide 10M customer bases -> To enlarge customer base by providing a prompt upgrade and to make online digital audio business by connecting it into JetAudio. “JetAudio is Portal.”

Break-down by business part

FY99 FY00 FY01 FY02

MP3 Player

Sales 1 560 1,780 11,196

Net Profit

55 242 2,053

% 10% 14% 18%

WirelessInternet

Sales 107 459 1,806 4,182

Net Profit

20 108 292 1,129

% 19% 24% 16% 27%

Software Sales 1,301 2,770 2,440 385

Net Profit

448 1,068 1,172 369

% 34% 39% 48% 96%

Other(Xing-Q)

Sales 1 13 2,429 1,048

Net Profit

2 73 30

% 15% 3% 3%

Total Sales 1,410 3,802 8,454 16,811

Net Profit

468 1,233 1,779 3,581

% 33% 32% 21% 21%

- Increasing sales & net profit % in MP3 Player

- Every year twice sales in Wireless internet

(Million, KRW)