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SUN MICROSYSTEMS SIGNS AGREEMENT TO ACQUIRE PIXO TO ENABLE DISTRIBUTION AND Java(TM) Technology-based Software Enables Service Providers to Drive New Revenue Streams, Deliver Secure Content and Meet the Exponential Growth of Consumer Mobile Device Adoption SANTA CLARA, CALIF. - June 26, 2003 - Sun Microsystems, Inc. (NASDAQ: SUNW) today announced that Sun has entered into a definitive agreement to acquire Pixo Inc., a privately-held company based in San Jose, California. Pixo provides network operators with JavaTM technology-based server software to manage the secure distribution and monetization of digital content for end users' mobile devices. This acquisition will solidify Sun's leadership in mobile data services and create a presence for Sun in the arena of digital rights and access management for content distribution. Pursuant to the terms of the agreement, Sun will acquire Pixo in an all cash transaction. The acquisition is expected to close in the first quarter of Sun's 2004 fiscal year, which begins July 1, 2003. This acquisition is subject to customary closing conditions. Following completion of the acquisition, Pixo will become an integral part of Sun's Software organization under the leadership of Jonathan Schwartz, executive vice president, Software. "The adoption of Java technology and the Java CardTM Subscriber Identity Module (SIM) standard are unleashing revenue opportunities on a sea of new and emerging devices," said Schwartz. "From mobile phones to home audio equipment, set-top boxes to desktop personal computers, Java and Java Card technologies bring authentication, and new service delivery possibilities wherever they go. The acquisition of Pixo accelerates that opportunity for Sun, for the operators of those services, the users of those devices, and the providers of all forms of digital content - from music and videos, to games and enterprise applications. Pixo provides a critical link integrating the evolution of JavaTM 2 Platform, Micro Edition, with the pervasive adoption of Sun's SolarisTM Operating Environment and JavaTM 2 Platform, Enterprise Edition." Pixo's server software enables network operators and enterprises to centrally manage content, customize multiple subscriber interfaces and allow rapid downloads of secure digital content, including Java applications. It will also provide a consolidated platform to add, manage, market, download and bill for all types of wireless content regardless of where that content is physically located. Pixo enables network operators to automate this process, which can lower costs, decrease time to market and enable them to focus on deriving new revenue streams from deploying new downloadable services. The Pixo product can simplify deployment of new services for both network operators and enterprises. It will be offered in conjunction with Sun's recently announced mobility programs, which includes the Sun Developer Network Mobility Program, Business Mobility Initiative and Unified Testing Initiative for Wireless Java Applications. Usability is critical for end-users and the Pixo technology benefits end-users by delivering content that is relevant to them and available for their mobile device. For example, network operators will be able to know what type of game to recommend to an end-user based on previous downloads or notify them of the availability of a new "level" of a previously downloaded game. End-users will also benefit from an easier way to make secure payment transactions. In the future, Pixo will become part of the Project Orion platform, which converges Sun's software offerings into a predictable, scheduled quarterly release of an integrated software system distributed on Solaris Operating System, Solaris x86 Platform Edition and Linux. By deploying Project Orion, customers will also benefit from an overall lower cost of acquisition and speed up time to deployment. This press release contains forward-looking statements regarding future results or financial performance of Sun Microsystems Inc., including statements relating to the impact of the Pixo acquisition and the addition of the Pixo product to Sun's platform, the convergence of the Pixo product offerings with Sun's software and the release of an integrated software system. Such statements are just predictions and involve risks and uncertainties such that actual results and performance may differ materially. Factors that might cause such a difference include risks associated with integrating an acquired company into Sun and acquired products with Sun products, developing and marketing new products, lack of success in the timely development, production and acceptance of new products and services and in technical advancements, Sun's inability to compete successfully in the highly competitive and rapidly changing marketplace, failure to retain key employees, cancellation or delay of products, increased competition and continued adverse general economic conditions in the U.S. and internationally. These and other risks are detailed from time to time in Sun's periodic reports that are filed with the Securities and Exchange Commission, including Sun's annual report on Form 10-K for the fiscal year ended June 30, 2002 and our quarterly reports on Form 10-Q for the fiscal quarters ended September 29, 2002, December 29, 2002, and March 30, 2003. About Sun Microsystems, Inc. Since its inception in 1982, a singular vision -- "The Network Is The Computer" -- has propelled Sun Microsystems, Inc. (Nasdaq: SUNW) to its position as a leading provider of industrial-strength hardware, software and services that make the Net work. Sun can be found in more than 100 countries and on the World Wide Web at http://sun.com.