"For the smartphone market, we have made some truly exciting progress in the past eight months since the launch of our smartphone product platform. During this time, we have accumulated over 10 million smartphone users who are utilizing our smartphone application store, browser, games, game center and PC assistant on a regular basis. Over the coming quarters we anticipate this strong growth to continue as we see greater adoption of low-cost smartphones begin to take hold. Moreover, we have cemented strategic partnerships with over 160 smartphone handset partners. These partners are preinstalling our products, which we expect will further expand our user base and content offerings. We also anticipate additional growth through the offline store front from strategic partnership wins with Suning as well as forming other similar strategic partnerships covering important distribution points for low cost smartphones. Given our recent success, we are increasingly confident that we are implementing the correct strategy for successfully targeting the Chinese smartphone market."

Carl Yeung, Chief Financial Officer of Sky-mobi, commented, "We were encouraged by exceeding our revenue guidance, along with our operating profit, net income and cash flow all being positive. Despite the year over year decline in revenues, we believe that the 5.1% sequential revenue growth, the improvement in non-IRFS gross margin and a turnaround in non-IFRS profitability from a net loss last quarter are trending in the right direction. These sequential improvements are clearly a testament to our ability to adapt quickly to the changing mobile Internet market with effective operating strategies. Moreover, we are very excited that our revenue composition continues to improve with a new high of 30% of revenues coming from higher ARPU associated with our Maopao community, giving us a strong foundation for future expansion in revenue and margin over the long run. Overall, this quarter's results demonstrate management's commitment to maintaining a healthy financial profile while evolving with new initiatives to stay in front of China's dynamic mobile marketplace."

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