Neonode® Launches Neonode Smartphone I – High Performance - Low Cost Mobile Phone Touch Solution

Market Release of Neonode’s Multi Touch Solution for Smart Phones and Feature Phones – Unique Set of Functions at a Groundbreaking Low Cost

SANTA CLARA, Calif.--(BUSINESS WIRE)--Neonode Inc., (NASDAQ:NEON), the optical touch technology company, announced today the market introduction of Neonode Smartphone I – the company’s new all-in-one touch solution for next generation smart- and feature phones. Neonode Smartphone I is a fully integrated mobile phone touch sensing solution, enabling a total BOM (bill of material) unit cost as low as $2, in high volume production.

“Consumers in large cost-sensitive regional markets - in Asia, Africa and South & Latin America - will expect feature-rich smartphones with all the current advantages, but at a much lower price than the high-end smartphones available today.”

Neonode Smartphone I, based on Neonode’s cutting-edge MultiSensing™ technology, is likely the fastest and most responsive touch solution on the market today - up to 10 times faster than industry standard capacitive solutions. It offers a comprehensive feature set and all the capabilities that are expected from a state-of-the-art smartphone of today, such as:

• Touch based gestures and features can be activated via any object, such as a finger, gloved finger, paint-brush, stylus or an ordinary pen
• Ultra-low power utilization, including Neonode’s energy saving AlwaysON™ feature
• 1000 Hz scanning rate achieving close to zero latency for fast accurate pen tracking, gestures and sweeps
• Pressure sensing
• Low total building height for designing super thin devices
• Short range Proximity sensing – touch free air gestures, sliders and near object detection
• Full sweep and gestures recognition for user-friendly navigation, including multi-touch smooth zooming and pinching
• Very high resolution with a virtually 100% glare-free touch screen, optimized for usage in practically any type of lighting condition, including direct sunlight
• Extremely ruggedized; works in a very wide temperature range and in rough environments

The Neonode Smartphone I, solution uses Neonode´s single chip touch frontend IC, the NN1001, developed together with our partner Texas Instruments. The NN1001 connects directly, with a high speed 1.8/3.3V SPI interface, to virtually any microcontroller or application/baseband processor. The touch software can run directly on the application processor, sharing its memory and processing power, thereby reducing cost and increasing performance. This configuration also makes field software updates possible, as the touch driver now is a part of the total operating system.

“This is very good news for the mobile phone manufacturing community! With our background as pioneers in the field since 2001, we have gathered all our know-how to bring worldwide mobile phone designers and manufacturers a truly compelling touch solution, both in terms of performance and cost,” said Thomas Eriksson, CEO of Neonode Inc. “Consumers in large cost-sensitive regional markets - in Asia, Africa and South & Latin America - will expect feature-rich smartphones with all the current advantages, but at a much lower price than the high-end smartphones available today.” Mr. Eriksson continued. “We are convinced that Neonode Smartphone I will play an important role in bringing high performance touch enabled mobile phones to the true mass market - as well as contributing to improved margins in the handset industry.” he concluded.

The Neonode Smartphone I solution is built on Neonode’s patented infrared zForce® touch technology, incorporated in to more than 10 million devices in the global market place. For more information about zForce touch technology, MultiSensing technology and Neonode Smartphone I please visit http://www.neonode.com or watch a demonstration on YouTube:

http://youtu.be/31E-hFeY2RI

http://youtu.be/sUvO8GUxzrg

About Neonode MultiSensing Touch Technology:

Neonode’s MultiSensing technology, rivaling the best established touch solutions at a fraction of the cost, is currently being incorporated into wide array of high volume color LCD products worldwide: mobile phones, tablets, office equipment, in-car infotainment displays, GPS, gaming devices and toys. The majority of those products are intended to be launched during 2013 and onwards.

About Neonode

Neonode Inc. (NASDAQ:NEON) develops and licenses the next generation of MultiSensing touch technologies, allowing companies to differentiate themselves by making high performing touch solutions at a competitive cost. Neonode is at the forefront of providing unparalleled user experiences that offer significant advantages for OEM's. This includes state-of-the-art technology features such as low latency pen or brush sensing, remarkably high speed scanning, proximity-, pressure-, and depth sensing capabilities and object-size measuring.

Neonode’s patented MultiSensing technology is developed for a wide range of devices like mobile phones, tablets and e-readers, toys and gaming consoles, printers and office equipment, automotive or inflight infotainment systems. NEONODE, the NEONODE Logo and zFORCE are trademarks of Neonode Inc. registered in the United States and other countries. MULTISENSING, LIQUID SENSING, IT MAKES SENSE and ALWAYSON are trademarks of Neonode Inc. For more information please visit www.neonode.com

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements relating to expectations, future performance or future events, and product cost, performance, and functionality matters. These statements are based on current assumptions, expectations and information available to Neonode management and involve a number of known and unknown risks, uncertainties and other factors that may cause Neonode's actual results, levels of activity, performance or achievements to be materially different from any expressed or implied by these forward-looking statements.

These risks, uncertainties, and factors are discussed under "Risk Factors" and elsewhere in Neonode's public filings with the U.S. Securities and Exchange Commission from time to time, including Neonode's annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K. You are advised to carefully consider these various risks, uncertainties and other factors. Although Neonode management believes that the forward-looking statements contained in this press release are reasonable, it can give no assurance that its expectations will be fulfilled. Forward-looking statements are made as of today's date, and Neonode undertakes no duty to update or revise them.