Neonode (NASDAQ:NEON), the Swedish mobile communication company that develops touch screen technologies and designs mobile handsets in which the technology also can be used, today announced an agreement with Turnstone Mobile Media LLC (TMM), a portfolio company of Turnstone Capital Management LLC, to distribute its products in India.

Under terms of the exclusive sales agreement, TMM, through its New Delhi-based affiliate, will be sole distributor of the unique Neonode N2 touch-screen mobile phone and related products in India, where cell phone and wireless infrastructure growth is one of the fastest in the world. Neonode has already made a substantial first shipment of its Neonode N2 mobile phones to TMM.

Neonode N2 uses the most advanced touch screen technology, the zForce(TM) optical touch screen. It doesn't need any hard pressure or stylus but works quickly and accurately by reacting to sweeping and tapping signals on the screen. The intuitively organized user interface, neno(TM), delivers quick and easy access to applications and content.

"We are excited to be introducing the new Neonode N2 to India, where demand for the latest innovations in technology, especially mobile communications and entertainment, is among the highest in the world. Based on initial reactions by the largest carriers, distributors, retailers, and consumers throughout India, we anticipate the Neonode N2 will be well-received and are looking forward to announcing its release the first quarter of 2008," said Marc La Magna, Managing Partner of Turnstone Capital LLC.

Neonode N2 was commercially launched in August 2007 and showcased at the U.S. Consumer Electronics Show in Las Vegas January 9-12, 2008. Currently Neonode N2 is available throughout markets in Europe and is also sold via the company's web shop; www.neonodewebshop.com. The company's innovative products will be marketed in North America, Latin America and China through its recently formed affiliated company, Neonode USA. With signing of this distribution agreement with TMM in India, Neonode makes another strategic business deal, placing the Neonode N2 in yet another significant market. New distributors continue to be added worldwide.

"We are delighted to add such an outstanding organization such as TMM to our growing family of distributors and licensors. This agreement secures our entry into India, the fastest-growing and one of the most exciting mobile markets in the world," said Mikael Hagman, CEO and President of Neonode Inc.

About Neonode

Neonode designs and develops intuitive technologies and products. The company's focus is on solutions that increase the user experience of complex or monotonous devices. With offices in Stockholm, Sweden, San Ramon, USA, Shanghai and Hong Kong, China, Neonode Inc. is a publicly traded company (NASDAQ: NEON) with licenses and products sold worldwide through both direct web sales and local distribution partners. The affiliated company, Neonode USA, markets Neonode's innovative products within North America, Latin America and China and is the exclusive worldwide licensor of the Neonode Intellectual Property to third parties. Neonode USA's main office is located in New York, USA.

About Turnstone Mobile Media

Turnstone Mobile Media LLC is a licensing and distribution firm specializing in providing unique consumer and business mobile devices, accessories, and content to emerging market segments. Turnstone's partners have extensive experience in design, manufacture, and deployment of mobile devices, media, and markets worldwide.

Forward-Looking Statements

This news release contains certain forward-looking statements that involve risks and uncertainties, including statements regarding future products and technology developments. Such statements are only predictions and the company's actual results may differ materially from those anticipated in these forward-looking statements. Factors that may cause such differences include, but are not limited to, the ability of Neonode to develop and sell new products and technologies. These factors and others are more fully discussed in the documents the company files from time to time with the Securities and Exchange Commission, particularly, the company's most recent Form 10-K and Form 10-Q. Neonode and the Neonode logo are registered trademarks of Neonode Inc. All other brand or product names are trademarks or registered.

SOURCE: Neonode Inc.

Neonode Karin Lehmann Nilsson, +46 708 25 40 91 Information Manager or Allen & Caron Inc Brian Kennedy, +1-212-691-8087 (Media) [email protected] Rudy Barrio, +1-212-691-8087 (Investors) [email protected] or OutRep International Jessee Allread, +1-530-891-0557 Information Manager