Pace's Game Plan

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Following the announcement that chief executive Malcolm Miller will leave the
company, Pace Micro Technology plc continued to report progress in its strategy
of diversifying its global operations -- a plan designed to reduce its
dependence on the troubled U.K. and European pay TV businesses.

Miller announced Oct. 8 that he would leave Pace at the end of the year to
become CEO of Raymarine Group Ltd., a maker of electronic equipment and
navigational equipment for boats.

Neil Gaydon, president of Pace Americas and an executive director of Pace
Micro, noted that Miller had decided to leave the company 'because he saw a
tremendous opportunity to grow that company.'

Miller joined Pace in the late 1990s to revitalize the company, and he had
managed to dramatically improve performance until Pace, like other vendors, was
badly hit by a downturn in the European and U.K. pay TV businesses.

Those troubles pushed Pace's stock dramatically lower this year, as the
company had to revise its sales projection downward. Shares did, however, rise
in last week of October, when the Times of London reported that the
company might be sold to Scientific-Atlanta Inc., which has been trying to
expand its European business.

On Oct. 30, a spokesperson for the company vigorously denied those rumors.
saying they had 'no substance.'

Gaydon noted that Pace remains 'No. 1 in Europe in terms of box shipments,'
but he admitted that it had been a 'tough year' for Pace and the other players
in that market. Like others, he believes a significant recovery may not occur
before 2004.

On a positive note, he added that U.K. operator NTL Inc. has established a
new schedule for deploying Pace boxes and has stuck to that schedule. Earlier
this year, Pace's shares fell when financial woes at NTL forced Pace to suspend
delivery of 300,000 boxes.

'We are eating through those boxes,' he said, 'and we are continuing to
supply Telewest [Communications plc].'

In North America, Pace's efforts are starting to pay off, Gaydon added. Time
Warner Cable has ordered 150,000 boxes. Comcast Corp.'s order has been delayed
as a result of some changes in specifications, but Gaydon said they are on
target to deploy the boxes in the second quarter.

Gaydon also pointed out good demand for other products in Asia, particularly
in the Internet-protocol-TV area.

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