For Immediate Release

"This is a development of tremendous importance for VTech," said Mr. Allan Wong, Chairman of VTech Holdings Ltd. "Through these agreements, VTech will bring some of children's favourite Disney characters even more fully into their lives and learning. As we revamp our product ranges to take advantage of this powerful brand synergy, they will provide a major impetus to growth in revenues and profitability for our ELP business and regain our market share in the US market. In particular, we expect the use of Disney characters to seal the success of V.Smile, which is an entirely new product category that has no direct rival in the current market place."

Disney Consumer Products also expressed enthusiasm for the synergistic licensing agreements.

"We look forward to the co-operation with VTech. We are delighted that children will be able to learn while being entertained with Disney characters such as Winnie the Pooh through the medium of VTech products," said Edward Catchpole, Vice President, Toys Europe, Middle East and Africa, Disney Consumer Products.

"VTech's strong brand heritage and dedication to introducing quality, fun products forms a natural basis for introducing Disney branded merchandise into their range," said Jessi Dunne, Senior Vice President, Global Toys, Disney Consumer Products.

The initial terms of the licensing agreements range from two to three years and the effective dates range between September 2003 and June 2004. They cover VTech's key markets in North America and Europe (such as the United Kingdom, France, Spain and Germany), Eastern Europe, the Middle East and Africa.

In North America, VTech will be able to use Winnie the Pooh character in all its electronic learning aids. For the TV Learning System, V.Smile, VTech will be able to use additional characters, such as Mickey & Friends, The Little Mermaid and the Lion King.

In Europe, VTech will launch a range of electronic learning aids featuring the Winnie the Pooh character. In addition, VTech will have rights to apply Winnie the Pooh, Mickey Mouse, Lion King and Disney Princesses in its electronic book and TV learning System, V.Smile.

These synergistic licensing agreements with Disney Consumer Products form an integral part of VTech's three-year strategic plan to revitalise its ELP business by developing an entirely new range of innovative products. In particular, the licensing agreements will be a powerful success factor in its unique TV Learning System, V.Smile, a powerful platform that will bring incremental revenues from hardware and exchangeable software cartridges.

The New V.Smile

V.Smile is a product unique to VTech and to the market that turns "game time" into "brain time". It uses the medium of television to explore child-directed play through a TV gaming console that features different game cartridges offering new entertaining and learning experiences.

Connecting directly to a television, the child manipulates a hand-held controller with intuitive buttons and a joystick that allows for both right and left handed use to enter a world of imagination and creative learning as characters guide them through various age-appropriate skill levels and developmental activities.

V.Smile was previewed to the trade in the United States in October 2003 and retailers are eagerly anticipating the launch of the new product. With a host of colourful Disney characters to choose from, V.Smile will be recognised immediately by parents and children alike, giving it instant appeal.

"I firmly believe that the synergistic licensing agreements with Disney Consumer Products, coupled with the launch of our unique new TV-based learn-while-you-play product, V.Smile, represent a new ¡®hero' product that will take the ELP industry by storm," said Allan Wong. "We look forward to a successful roll-out in 2004."

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About VTech:
VTech is the one of the world's largest suppliers of cordless phones as well as a leading supplier of electronic learning products. It also provides highly sought-after contract manufacturing services. VTech is a pioneer in the establishment of China-based manufacturing facilities and sells its products via a strong brand platform supported by a well-established distribution network in North America, Europe and Asia.

This release is issued by VTech Holdings Ltd through Golin/Harris Forrest. For further information, please contact: