Leading European Consumer Goods Manufacturer Gorenje, d.d. Adopts Echelon's LonWorks Platform(San Jose, CA– June 7, 2004) - Echelon Corporation (NASDAQ: ELON), the creator of the LonWorks® device networking platform for connecting everyday devices to each other and the Internet, and Gorenje, d.d., Slovenia's largest exporter of household appliances and one of Europe's largest household goods manufacturer, today announced that Gorenje's next generation networked home appliances will be based on Echelon's LonWorks technology. Gorenje is incorporating Echelon's market leading power line signaling technology into a new range of LonWorks based appliances targeted at the mid-to-high end European consumer appliance market. The new line of appliances is scheduled for market introduction in Q2 2005 and is planned to include refrigerators, dishwashers, microwave ovens, and conventional ovens to provide consumers with a complete, intelligent kitchen. These products will be designed to actively lower energy costs while improving performance, reliability and convenience. Gorenje's appliance strategy includes the delivery of value-added services for consumers such as advanced appliance diagnostics and monitoring via a broadband service gateway utilizing Echelon's OSGi™ LonWorks Bundle. According to Franjo Bobinac, Gorenje's CEO and chairman, "We see a strong market trend toward a higher quality of life, greater safety, and a growing demand for increased quality of service across all sectors in the consumer market. We intend to meet that demand by partnering with Echelon to deliver kitchen and home appliances that have extremely high intrinsic value, connect to value-added service portals, and most importantly, deliver on the promise of the digital lifestyle so many consumers are demanding. Further, we are determined to create an open network environment for consumers of our products – one that is standards-based, provides the freedom to choose products from any vendor, and is supported worldwide. We selected Echelon's power line signaling technology and the LonWorks platform because it is the only solution available today that meets all of our criteria." In addition to partnering with Echelon, Gorenje has joined the LonMark® International trade organization to support the definition and propagation of open standards for home appliances worldwide and has become active in the LonMark Task Group for Appliances. The company is also working with Echelon and LonMark on furthering cooperation between the European appliances standards group (CECED) and the North American appliances standards group (AHAM). "We're delighted that Gorenje has decided to create networked products and solutions that can have such a positive impact on people's lives," said Ken Oshman, Echelon's CEO and chairman. "Gorenje's artistic industrial designs and advanced features make their products very attractive and set them apart from the mainstream. We believe that Gorenje's adoption of Echelon's power line technology, open standards, and interoperability will allow them to deliver networked products that offer the same level of choice and compatibility that consumers enjoy today in non-networked products. In choosing to add networking to their products in this manner, Gorenje should gain a competitive edge – setting the stage for creating a better customer experience, offering advanced new services, and generating greater brand loyalty." Gorenje is adopting Echelon's PL 3120® and PL 3150® Power Line Smart Transceivers to leverage existing power in homes and eliminate the need for additional network wiring. Echelon's OSGi LonWorks bundle will be embedded in Gorenje's home gateway to allow dynamic services that leverage the LonWorks network to be deployed through Gorenje's home services Web portal. The OSGi service platform is an international standard that allows for the dynamic delivery of services to connected devices across broadband gateways. Potential services to be provided by Gorenje include advanced predictive warranty, remote diagnostics, preventative remote maintenance, energy management and other services. About Gorenje Group About Echelon Corporation ### Echelon, LonWorks, 3120, 3150, LonWorld, LonMark, the LonMark logo and the Echelon logo are registered trademarks of Echelon Corporation registered in the United States and other countries. LonSupport is a trademark of Echelon Corporation in the United States and other countries. This press release may contain statements relating to future plans, events or performance. Such statements may involve risks and uncertainties, including risks associated with uncertainties pertaining to the timing and level of customer orders, demand for products and services, development of markets for Echelon's products and services; risks associated with market acceptance of LonWorks based products and services leveraging LonWorks based products offered by Gorenje; risks associated with the successful integration of Echelon's power line signaling technology into Gorenje's products; and other risks identified in Echelon's SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Echelon undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 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