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McAfee Inc. to Establish New Wholly-Owned Subsidiary in China


Forming New Chinese Subsidiary Part of Expanded McAfee Investment in China, Company Aims To Boost China Business

BEIJING & SANTA CLARA, Calif. - McAfee, Inc. (NYSE:MFE) today announced it is establishing a new wholly-owned subsidiary in China. The new subsidiary forms part of a new investment McAfee is making in China and the Chinese market.

“China offers compelling opportunities for McAfee,” said Dave DeWalt, McAfee president and chief executive officer, at a press event in Beijing today. “China has great potential as a center for manufacturing, research and development for McAfee and is also a significant burgeoning market for our products. McAfee has continuously strengthened its presence in China over the last decade and we are planning to expand our investment in the near term to take full advantage of the opportunities China presents.”

The McAfee expansion in China is planned to include:

* Establishing of a new wholly-owned subsidiary in China.
* A new call center planned to open in Beijing in February 2010 to service the mid-market segment, particularly in smaller cities across China.
* Additional headcount in functions including sales, sales engineering, marketing, support and research and development (R&D), including a planned doubling of the field sales organization in 2010.
* Recently signed reseller partnerships with both Neusoft and CS&S (China National Software and Services) who have become premier partners for McAfee products in China.
* A partnership with Lenovo to market McAfee VirusScan products through Lenovo retail outlets across China, opening up a significant retail channel for McAfee and contributing to our position as the world’s largest dedicated security technology company. McAfee products ship on more than 50% of the PCs shipped by the top 10 PC OEMs.
* A partnership with Dell to offer China consumers 15 month subscriptions on all their retail and direct systems with a Microsoft Windows preinstalled.
* Plans to deepen long established partnerships with some of China’s biggest companies including CS&S, Dell, Digital China, ECS, Lenovo, Shanghai SI and Suntek
* New, yet to be announced partnerships with other companies in China.

“We also recently signed an agreement in which China Unicom will market our security products to their mobile phone customers in China,” added DeWalt. “In addition, China Telecom in Guangdong has also agreed to partner with McAfee to market McAfee products to their broadband users.”

Current McAfee operations in China include sales, manufacturing of the McAfee Unified Threat Management Firewall and an R&D team focused on mobile security, localization and security research. With the establishment of a new local subsidiary and the planned increased investment, McAfee intends to significantly grow its China business over the next few years.

Market Opportunity

The Chinese market opportunity is significant. Analysts expect both GDP and PC ownership to show strong growth over the next three years. McAfee estimates that its potential addressable market in China will grow from about $390 million in 2009 to $1.09 billion in 2013.

China’s PC market has enjoyed years of double-digit growth and is expected to grow by 19 percent in 2010, according to IDC*. At the same time, Internet usage in China is growing rapidly. In 2008, 22.5 percent of China’s population had access to the Internet, up from only 8.5 percent in 2005, according to World Bank figures.

McAfee is perfectly positioned to provide security as more Chinese go online. As the world’s largest dedicated security company McAfee is the only provider of integrated solutions that secure endpoints, networks and data centers and provide risk and compliance management as well as open security management through the McAfee® ePolicy Orchestrator platform. McAfee Global Threat Intelligence learns from the installed base and from researchers around the globe to deliver market leading security in real time.

McAfee has had a presence in China for over a decade and is now broadly recognized by customers for its unique, comprehensive, proactive and proven solutions and services. Today, McAfee helps customers from every industry in China, including government, telecom, finance, insurance and manufacturing, and has built strong relationships with local channel and reseller partners. McAfee Labs has personnel in China that identify and fight against local computer security threats.

“We are proud to have some of China’s largest IT companies as partners. With our partners, we are seeing great success especially in network security and data loss prevention, our fastest growing businesses in China,” said Steve Redman, president of McAfee in the Asia Pacific region. “We are fully committed to the China market and plan to boost our commitment by establishing a new wholly-owned entity and by making significant additional investments. We will think global, but act local, as we invest to become the leader in the Chinese market.”

* Source: IDC Asia/Pacific Quarterly PC Tracker, Q3 2009

About McAfee, Inc.

McAfee, Inc., headquartered in Santa Clara, California, is the world’s largest dedicated security technology company. McAfee is committed to relentlessly tackling the world’s toughest security challenges. The company delivers proactive and proven solutions and services that help secure systems and networks around the world, allowing users to safely connect to the Internet, browse and shop the Web more securely. Backed by an award-winning research team, McAfee creates innovative products that empower home users, businesses, the public sector and service providers by enabling them to prove compliance with regulations, protect data, prevent disruptions, identify vulnerabilities, and continuously monitor and improve their security.


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