magicJack Proclaims VoIP/ Wi-Fi and APP World About to Change

WEST PALM BEACH, Fla. and NETANYA, Israel, March 21, 2012 (GLOBE NEWSWIRE) -- magicJack VocalTec, Ltd. (Nasdaq:CALL) ("the Company"), a cloud communications leader that invented voice over IP (VoIP) and sold over eight million magicJacks®, announced today positive test results with a prototype of the Company's newly designed magicJack Wi-Fi chipset. The Company plans to integrate the new Wi-Fi chip into the award-winning magicJack for the second half of 2012.

Dan Borislow, CEO of magicJack, stated: "This week I have listened to what our home/business based VoIP telephone service will sound like in the near future. In addition to the best voice quality I have ever heard using a VoIP device, make no doubt about it, using our new chip makes the new Wi-Fi magicJack or a digital business phone the easiest to use of any VoIP device ever. The Company will reap the cost benefits of owning its own chip company when building Wi-Fi platforms with our proprietary single system-on-a-chip. You cannot simply build a device at any cost like many failing businesses continue to do. In addition to its new chip, the Company has tried its magicJack APP™ on the new iPad using 4G and also found the voice quality spectacular. Clearly 4G is the most important technology in 2012 and possibly 2013."

Borislow made his comments after he received a surprise phone call from Dr. Y.W. Sing, President of the Company's TigerJet chip subsidiary and the VoIP industry's premier chip architect, on a prototype magicJack board using the new chip. "Y.W. shocked me as I did not expect such perfection from an early test call nor did I think he had it ready to even make a call. We continue to be absolutely amazed with the voice quality a few weeks after this first call. There appears to be zero background noise and complete clarity from a Wi-Fi magicJack that will take seconds to make a call after plugging it into a power outlet." Borislow continued, "A lot of the risk has been eliminated from our business model, and our model will change based upon the ultimate timing of the magicJack Wi-Fi rollout and the company's prediction of the greatest market acceptance for a magicJack or VoIP product ever. We must be prepared for huge demand and with the proper mix of products."

The TJ980 chip includes seven additional functions on the system-on-a-chip (SoC) compared to fourteen functions on the TJ880 chipset currently used in the magicJack PLUS. Moreover, certain functions such as processing power, memory size and memory speed are doubled in the TJ980 compared to the TJ880. The Company expects that it will take at least 100 days for the TJ980 to go into production and be ready for sale. The magicJack Wi-Fi will be the same size as the existing magicJack PLUS.

New Functions on TJ980 Existing Chip Functions
   
• Dedicated high speed local bus for Wi-Fi RF • SLIC interface
• LCD panel display interface • Echo cancellation
• Seamless interface to DECT phone • DTMF tone detection, Dial tone generation
• Video compression engineer • Dial tone auto-stop function
• Auto audio gain control • Audio signal processing engineer, Audio CODEC
• Power saving sleep mode • USB flash disk interface for Windows, Mac
• Built-in double clock DDR memory • NAND Flash controller
  • CD ROM flash drive emulator with auto-run function
  • USB sound interface for Mac, Windows with Windows logo
  • Caller-ID generator
  • Off/On-hook detection
  • Full network layer function
  • ARM Core CPU dedicated for magicJack VoIP stack
  • Built-in SDRAM memory for code and memory

After the successful testing of the new magicJack Wi-Fi prototype, the Company has decided to develop its next chip that will use much less power for portable and mobile devices and use as a Wi-Fi 802.11n access point. This chip should take about one year to develop and build and will also enable large screen HD video on our Wi-Fi platforms. Furthermore, the new magicJack Wi-Fi can also be used as a Wi-Fi access point by simply plugging the unit into a cable/DSL modem, and for set-top cable and satellite boxes it can be used to receive Wi-Fi for video on demand in addition to using it for voice too.

Andrew MacInnes, Company President added: "With the popularity of the iPad® and other tablets, and the proliferation of Wi-Fi enabled smart phones, we believe the great majority of people with high speed Internet access will also have Wi-Fi available to them. Further we know people share the same high-speed service across multiple apartments using Wi-Fi. This appears to be near perfect timing for the magicJack Wi-Fi. The fact that the chip came out nearly perfect will certainly add to the equation. This chip and newer variants combined with our APPs will continue to keep magicJack the most relevant VoIP innovator."

Looking forward, the Company believes this chip will not only change the consumer VoIP space, but may be the driving force for businesses to adopt VoIP. This chip is strong enough to handle multi-line sets and multiple portable handsets. Discussing the decision to develop the new chip, Borislow stated: "We believe this is a very important chip for companies such as Apple and others. Apple's products may touch almost all users of computing/telephonic devices but it appears to us that an additional frontier could be digital business phones. They have tablets, laptops, desktop computers, music devices, and the iPhone® but they do not have a digital business phone. Furthermore, we believe business phones are not going away so quickly. With our chip, phone manufacturers could create an easy-to-use phone that can simply plug into a power outlet and enjoy much lower costs, higher quality, smaller size, and time-to-market advantages."

magicJack already makes a magicJack APP for Apple products and will soon make an Android version available. Now the business phone will also be enabled to connect to the Internet with ads and other pertinent information able to be displayed. Further we believe phone products and magicJack APPs on tablets could be very important for many other companies, including for example Amazon with its portable devices. The millions of users on all these products are perfect potential customers for many different companies. Alternatively, a magicJack Wi-Fi can be easily configured to work with cable and even DIRECTV or DISH, offering users the capability to have video on demand and phone service simply by using a new magicJack Wi-Fi. Companies like Cisco or NETGEAR® can make a magicJack Wi-Fi into an access point by connecting it to a cable or DSL modem. We could easily add a DECT chip to support portable handsets off this same magicJack Wi-Fi and connection. Equipment manufacturers could reduce their costs by over 70% with our chips and boards while having the capacity to handle multi-lines and multiple portable handsets. Retailers like Best Buy, WalMart and RadioShack would be able to sell the lowest cost, high quality digital handsets for business with free telecom service, in addition to selling the aforementioned Wi-Fi devices and other magicJack products. These are only a few possibilities of these new innovations.

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this press release, including statements about our projected revenues, cash flows, strategy, future operations, new product introductions and customer acceptance, future financial position, future revenues, projected costs, prospects, plans and objectives of management, are forward-looking statements. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. These factors include, among other things: changes to our business resulting from increased competition; any operational or cultural difficulties associated with the continuing integration of the businesses of VocalTec and YMax; potential adverse reactions or changes to business relationships resulting from the completion of the merger; unexpected costs, charges or expenses resulting from the merger; the ability of the combined Company to achieve the estimated potential synergies or the longer time it may take, and increased costs required, to achieve those synergies; our ability to develop, introduce and market innovative products, services and applications; our customer turnover rate and our customer acceptance rate; changes in general economic, business, political and regulatory conditions; availability and costs associated with operating our network; potential liability resulting from pending or future litigation, or from changes in the laws, regulations or policies; the degree of legal protection afforded to our products; changes in the composition or restructuring of us or our subsidiaries and the successful completion of acquisitions, divestitures and joint venture activities; and the various other factors discussed in the "Risk Factors" section of  our Annual Report on Form 10-K and other filings  with the Securities and Exchange Commission. Such factors, among others, could have a material adverse effect upon our business, results of operations and financial condition. We do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

magicJack® is a registered trademark of magicJack VocalTec Ltd. All other product or company names mentioned are the property of their respective owners.

About magicJack VocalTec Ltd.

magicJack VocalTec Ltd. (Nasdaq:CALL), the inventor of VoIP including the softphone and magicJack, has the goal of becoming the leading international provider of global voice over many platforms. The Company has achieved sales of over eight million of the easy-to-use, award-winning magicJack since the device's launch in 2008, and has the use of over 30 patents, some dating to when the Company invented VoIP. It is the largest reaching CLEC (Competitive Local Exchange Carrier) in the United States in terms of area codes available and certification in number of states, and the network has historically had uptime of over 99.99 percent.

The VocalTec Communications Ltd. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8568

CONTACT: Investor Relations
         Andrew MacInnes, President
         561-749-2255
         
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         Media Relations
         Kari Hernandez, INK Public Relations for magicJack
         512-382-8982
         
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