Trading Update

Synchronica PLC
04 December 2006


4th December 2006





                                Synchronica plc

                        ("Synchronica" or the "Company)


         Trading Update, Focusing Business Strategy and Cost Reduction


Tunbridge Wells, UK - 4th December 2006 - Synchronica, an international provider
of mobile device management and synchronisation solutions based on open
standards has today noted the adverse movement in its share price and wishes to
update the market as follows:


 1. The company has been in discussion for some months and is now at an advanced
    stage with a major international hardware manufacturer to provide
    Synchronica's SyncML Gateway under an OEM licence. This substantial contract
    is expected to be concluded in 2006. However, recent discussions have
    indicated that the initial revenue from this contract is now likely to be
    deferred until early 2007. As a consequence the directors now believe that
    the company will not meet current analysts' expectations for 2006. However
    this contract, once signed, will make a significant contribution to the
    Company's revenue for the next three years. In addition to this contract,
    the Company is at an advanced stage of discussion for a number of contracts
    which add to the revenue of £1.1m the company has so far recognised in 2006;
    on the basis of these contracts the directors expect to recognise revenue in
    a range from £1.1m to £2.0m for 2006. The Company will update analysts later
    today.

 2. Also the Company's financial performance in 2006 has been adversely affected
    by the following:

     a. The insolvency of BenQ Mobile, the Company's largest user of
        Synchronica's SyncML DM Server;
     b. Limitations in the Mobile Manager product, which addresses mainly the
        Windows Smartphone market and is dependent upon the Windows Server
        Operating system, while Mobile Operators generally prefer Unix based
        solutions; and
     c. ROM Builder has only been licensed to one customer and interest from
        potential customers has been lower than expected.


The directors have determined that the Company should refine its product
strategy and focus more of the Company's resources on Synchronica's award
winning SyncML Gateway where there has been the highest level of customer
acceptance and where there is the largest addressable market. Thus in the short
term the Company will focus on the product with which it has achieved the most
sales in 2006.


Synchronica intends to re-implement Mobile Manager using the Java programming
language on Synchronica's SyncML DM Server during 2007, which will allow
Synchronica to support the Unix Operating System and address the entire
Smartphone market as well as mass market Feature Phones. The Company has already
entered discussions with a number of interested parties to provide, for a
substantial fee, an exclusive licence for the existing Windows based Mobile
Manager source-code.


The above will allow the Company to focus its development on one software
platform, Java increasing the synergies between the products and removing
duplication of effort and expense. The directors estimate that this strategic
re-focusing will allow a cost saving of £1.1m in 2007 and will make a provision
of £300k in the Company's 2006 accounts to meet restructuring costs.


Synchronica has gained substantial traction particularly with SyncML Gateway,
for example in the previously announced contract with iXi Mobile SyncML Gateway
is a fundamental component of iXi's Ogo device, which aims to deliver a mobile
e-mail device to the mass market. This traction in conjunction with the OEM
agreement currently under negotiation as described above, should lead to a
growing, predictable and recurring revenue stream for the Company. These
revenues combined with the lower cost base noted above and the current cash
balance of £2.6m should, according to the Company's current forecasts, make
Synchronica fully funded.



Contacts at Synchronica:

Carsten Brinkschulte, CEO [phone], Mobile [phone]

Angus Dent, CFO, [phone], Mobile [phone]






                      This information is provided by RNS
            The company news service from the London Stock Exchange