1. Second Quarter 2006 interim report
Petri Markkanen
CEO
Birdstep Technology

2. Agenda
Second quarter 2006
Highlights
Financial figures
Birdstep strategy
Market outlook

3. Business Highlights
Quarterly laptop license activation increase with 21% from first quarter 2006, representing continuous year-on-year growth with more than 100%.
T-Mobile and Birdstep sign two year Frame Contract on product Development, software license distribution and software maintenance
Birdstep and Turkcell sign substantial agreement on client development and new Laptop Licenses.

4. Financial Highlights
Second quarter consolidated revenue is NOK 12.0 million, an increase with 35% compared to second quarter 2005
Second quarter wireless revenue is NOK 8.0 million, an increase with 54% compared to second quarter 2005
Birdstep emits 3 million new shares to Vollvik Invest AS for additional funds of NOK 42 million

5. Income Statement

6. Balance Sheet 

7. Cash Flow Statement

8. Consolidated quarterly Performance

9. Wireless quarterly performance

10. Birdstep – positioned for growth
2002:Proof of concept phase (technology)
First customers signed
Smaller deployments
2004:Proof of concept phase (market adoption)
Solid customer base
Commercial deployments all over the world
2006:Growth phase
Mobile Internet becomes main stream business
Important tool for ARPU growth
High growth with successful deployments

11. As demonstrated in the activation database

12. Business Model Operators
Provide tailored solutions for seamless connectivity and mobility for all devices and all access technologies
Work closely with strategic operators on both short term deliveries as well as longer term roadmaps
Device Manufacturers
Become the leading provider of seamless roaming and connectivity products to device manufacturers

13. Market Outlook Laptop Segment Smartphone Segment 2006: Growth phase
Mobile Internet becomes mainstream business
Important tool for ARPU growth
Operators plan for mass market adoption
2007: Mainstream business
Mass Market adoption
More services & higher speeds
Responsiveness & Support
Quality of service
User behavior statistics
Smartphone Segment
2006: Proof of concept phase
Smartphone manufacturers
Mobile operators
Smaller deployments
2007/08: Adoption & growth
OEM relation with Smartphone manufacturers
Commercial deployments with mobile operators

14. Industry Drivers Explosive 3G network deployment Flat rate data plans
Growth Enablers Laptop
Explosive 3G network deployment
77 M Subscribers  growing to Billion By 2010*
110 Networks
Flat rate data plans
Operator Marketing Campaigns
Embedded solutions for laptops
Growth Enablers Smartphone
Device availability
Growing demand for high speed data services such as:
Corporate and IM products
Music and Video
Mobile TV
Voice over IP
*Source: GSM Association, UMTS Forum, Wireless Intelligence

15. Laptop Market
The laptop connectivity market is expected to grow with at least 450% by 2011
The number of embedded modems will exceed the number of PC-cards by 2009

16. Laptop Market

17. Smartphone Market
The Smartphone market with built-in Wi-Fi capabilities is in an early proof-of-concept phase
The Smartphone market will grow from 1.8 million phones 2006 to 152 million phones by 2011

18. Smartphone Market

19. In conclusion
The market for laptop connectivity is becoming mainstream business for mobile operators with expected market growth of at least 450% by 2011
The Smartphone market with built-in Wi-Fi capabilities will grow from 1.8 million phones shipped 2006 to 152 million phones by 2011
Quarterly laptop client license activations increased with 21% compared to first quarter 2006 with year on year quarterly growth continuously above 100%
Birdstep believes in revenue growth on a full year basis and in substantial revenue growth 2007

20. Safe Harbor Statement
This news release contains forward-looking statements, including statements that are subject to certain risks and uncertainties, including, but not limited to, those associated with unpredictability and volatility of the price of the Company's Common Stock, the performance of and conditions in the Norwegian and world financial markets, the policies and actions of the Norwegian and other governments, and the general political, economic and business conditions in Norway and elsewhere.
Actual results could differ materially, as a result of such factors, from those set forth in forward-looking statements

21. Thank you for your attention!
Birdstep Technology