Investors meeting

Paris - April 22, 2008 Henri Crohas, CEO

Agenda

1. 2007 Results2. 2008 Outlook

3. Market Trends and Strategy

4. Today’s Product News

ARCHOS Revenue 2004-2007

58

103124

102

0

20

40

60

80

100

120

140

2004 2005 2006 2007

M€Pulled out of MP3 segment

• still representing 20 M€ revenue in 2006

Slow ramp up of Gen 5 production until September

• to stabilize manufacturing process and ensure top quality of product

Inadequate product mix in Q4• could not fulfill high demand for

WiFi PMPs after introduction of iPod Touch in October

With 102 M€ revenue in 2007,

ARCHOS could not reach the break even point estimated at 115 M€:

ARCHOS Revenue 2004-2007

58

103124

102

0

20

40

60

80

100

120

140

2004 2005 2006 2007

M€

0.11.7Other Financial Items

2.9(16.5)Net Result

(1.4)(6.1)Generation 3 & 4 Write off

(6.7)Smartdisk Litigation

4.2(5.4)EBIT

22.5%28.4%Operating Expenses (% Net Sales)

27.928.8Operating Expenses

25.8%23.1%Gross Margin (% Net Sales)

32.123.5Gross Margin

124.3101.8Net Sales

20062007P&L (M€)

P&L 2007 vs 2006

2007 Balance Sheet Overview (M€)Equity

Reduction in

Working Capital Requirement

0

20

40

60

2007 2006

0

20

40

2007 2006

Net Cash Position

4858

15

26

(M€)

(M€)

42 56

30 33

(58) (69)

14 20

Inventory

Account Receivables

Suppliers and Other Debts

2007 2006

Working Capital Requirement

2007 ARCHOS Scorecard

Difficult depletion of Generation 4 inventory resulted in heavy loss

Mass production of Generation 5 delayed until September

Shortage of WiFi PMPs subsequent to introduction of iPod Touch

Resolved IP litigation in Marshall Texas without disbursing cash

Gen 5 line fully restructured around WiFi-connected PMPs

Has significantly increased its installed base and brand visibility

Gen 5 positioned de facto as sole competition against iPod Touch

Starts year 2008 with:

• Sound and reduced Gen 5 inventory

• 48 M€ equity

• 15 M€ Net Cash Position

---+++++

Agenda

1. 2007 Results

2. 2008 Outlook3. Market Trends and Strategy

4. Today’s Product News

ARCHOS Q1 2008 Revenue

ARCHOS Q1 Revenue: 25.1 M€, +9% Y/Y

MP3/MP4 Market: -10% Y/Y

0

4

8

12

16

20

Europe USA Asia

+ 8 %

+ 19 %

- 8 %

2008

2007

(M €)

102322522232007 (M€)

+16%

29

Q3

+61%

51

Q4

+9%

25

Q1

+27%+11%

130252008 (M€)

Year Q2

Target 2008 Revenue: 130 M€

Internet Tablet - WiFi

Internet Tablet - WiFi & 3G+

New Internet Box

ARCHOS 605 GPS

ARCHOS TV+

2008 quarterly revenue objective

23 to 25%28%23.5%22.5%OPEX

24 to 26%23%26%26%Gross Margin

(5%)*

102

2007

0 to 2%

130

2008

3.5%

103

2005

2.5%

124Revenue

2006(M€)

2008: back to ARCHOS Business Model

* excl. Gen 3 & 4 write off

Agenda

1. 2007 Results

2. 2008 Outlook

3. Market Trends and Strategy4. Today’s Product News

Traditional non-connected MP3/MP4

• Stagnation of #units price erosion

• Slow growth in 2007

• Q1 2008 down 10% Y/Y

MP3/MP4 industry trends 2008

Internet-connected PMPs

• Strong growth anticipated

• Internet available everywhere

• WiFi in the house

• 3G+ outside

Market Trends & Strategy

Web pages tailored to mobile handsets

failed to create the “Mobile Internet”

WAP or stripped-down web sites

failed to create the “Mobile Internet”

There is Only One Internet!

3”3”

There is Only One Internetand web pages are 800 to 1000 pixels wide!

Minimum Screen Resolution

• 800 x 480 pixels

Minimum Screen Size

• 5” for pocket-sized

• 4.3” is a compromise• 3” is just too small

Mobile Internet Tablet :

5”5”

Market Trends & Strategy

Market Trends & Strategy

3G+ (HSDPA) now deployed all over Western Europe• 80% population coverage in France by end 2008

Mobile Broadband Internet becomes reality !

Mobile devices will run standard PC applications in 2009

• Browser, Email, Web 2.0, Web 3.0, Widgets, Plug-ins…

Ultra low-power X86 processors become reality !

Market Trends & Strategy

Internet for Mobility• Large Screen and High Capacity• WiFi and 3G+

TV for Mobility• TV Recording • Web on TV • DVB-T & Web TV

Content for Mobility• ARCHOS Content Portal & ARCHOS Media Club• 8000 Videos On Demand

ARCHOS makes

Mobile Internet Tabletsfeaturing:

Bu

sin

ess

Con

sum

er

Productivity Communication Information Entertainment

Use

rMarket Trends & Strategy

Mini PCPDA5M

Premium Smartphone

60 M

PMP(Portable Media Player)

10 M

PND(PersonalNavigationAssistant)

35 M

Mobile Devices which will connect to the Internet

Usage

Office appsWeb, Mail, IM…

Web, Networking,Mail, IM…

GPS, Web, POI, News…

TV, Movies, Photos, Web, Games, IM…

voice-centric

data-centric

2008

Market Trends & Strategy

Mini PCPDA5M

Premium Smartphone

60 M

PMP(Portable Media Player)

10 M

PND(PersonalNavigationAssistant)

35 M

Mobile Devices which will connect to the Internet

voice-centric

data-centric

2008

Bu

sin

ess

Con

sum

er

Use

r

UsageProductivity Communication Information Entertainment

Office appsWeb, Mail, IM…

Web, Networking,Mail, IM…

GPS, Web, POI, News…

TV, Movies, Photos, Web, Games, IM…

Q2 2008

Q4 200

8

Market Trends & Strategy

Mini PC10 M

Premium Smartphone

80 M

Mobile Internet Tablets70 M

Mobile Internet Devices B

usi

nes

sC

onsu

mer

Use

r

UsageProductivity Communication Information Entertainment

Office appsWeb, Mail, IM…

Web, Networking,Mail, IM…

GPS, Web, POI, News…

TV, Movies, Photos, Web, Games, IM…

2010

Market Trends & StrategyARCHOS Evolution of Product Mix

2007 2008

30%Gen 5 WiFi 50%

Internet Tablet10%

Internet Tablet3G+

10%TV+ Box

40%Gen 5WiFi

15%Gen 5

non-WiFi45%

Gen 4 non-WiFi

2009

60%Internet Tablet

25%Internet Tablet

3G+

15%TV+ Box

2007 2008

2009

4%OEM

80%Retail

10%OEM

10%TelCos

96%Retail

65%Retail

10%OEM

25%TelCos

ARCHOS Evolution of Client Mix

Market Trends & Strategy

Agenda

1. 2007 Results

2. 2008 Outlook

3. Market Trends and Strategy

4. Today’s Product News

ARCHOS 605 GPSEntertainment & Navigation solution

High resolution 4.3” - Traffic info - Tele Atlas maps - Speed cam

Web Radio and TV plug-in

Traditional Radio Stations

9,600 Web Radios - 110,000 Podcasts

Independent Podcasts

Web Radio and TV plug-in600 Web TVs

Traditional TV Channels Independent TV Channels

Content Portal2008: 10 new partners - 8,000 videos

ARCHOS Media ClubParamount movie portfolio

TM, ® & Copyright © 2008 by Paramount Pictures. All Rights Reserved

250 movies

Your TV live teleported to your mobile device

In your home In your garden Anywhere in the world

At home… Anywhere in the world…

How it works?