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Market Disruption Caused by Availability of Apple’s iPhone Creates Major Performance Challenge for Retailers

HENLEY-ON-THAMES, UK, November 27, 2007— Callidus Software Inc. (NASDAQ: CALD), the leader in Sales Performance Management (SPM), today warned that UK mobile phone retailers may face a significant challenge to manage sales performance in the aftermath of Apple®’s UK launch of its iPhone. The major shift in consumer subscriptions and the rush to both provision iPhone customers and offer compelling alternative handsets means mobile retailers face their greatest sales pressure in years as they seek to manage salesforce incentives, Callidus says.

UK mobile operator O2, the exclusive UK network operator for the iPhone, has projected(1) that, by Christmas, it will sell around 200,000 of the handsets, which became available on November 9. Meanwhile Carphone Warehouse, the exclusive UK retailer, predicted(2) sales of 10,000 units on the launch day alone. Rival operators and retailers are intensifying their efforts to prevent customers from moving to iPhone subscriptions, which has created added pressure for them in managing sales performance online, via the High Street and through partners.

“Competition in the UK mobile phone retail market has long been intense but the iPhone’s arrival has changed the game,” said Bill Schuh, vice president for Europe at Callidus Software. “There is a sales frenzy as retailers try both to lure away customers to the iPhone and provide alternatives to it. It means that daily management of how the salesforce and channel are compensated with incentives has become critical. But unless retailers find a more effective, instantaneous way to do this, they face a bleak Christmas once the dust from the iPhone launch has settled.

“In challenging economic times and faced with unprecedented competition, companies are pursuing new ways to drive revenue and optimise profitability. Sales performance management is one of the untapped levers to bring these strategies to life in telecommunications. Callidus’ solutions help companies align sales behaviour with corporate objectives,” said Mr. Schuh.

Callidus provides on-premise and on-demand sales performance management software that enables closer management of incentive compensation, tracking of actual sales versus planned sales and more effective product administration, which creates enhanced sales and distribution performance.

“In the aftermath of the iPhone launch, mobile retailers in the UK will need to take a long, hard look at how they manage handset sales and incentivisation. The likely shift in the subscriber base and rush to renew handsets will create a sales aftershock that is likely to last for months, if not years,” concluded Schuh.

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Notes to editors:

(1) http://www.guardian.co.uk/technology/2007/nov/13/iphone.mobi...
(2) http://www.telegraph.co.uk/connected/main.jhtml?xml=/connect...

About Callidus Software®

Callidus Software (www.callidussoftware.com, NASDAQ: CALD) is a leading provider of on-premise and on-demand Sales Performance Management (SPM) solutions to global companies across a broad range of industries. Our software allows innovative enterprises of all sizes to strategically manage incentive compensation, set quota targets, administer producers, and align territories, resulting in improved sales and distribution performance. Over 1.8 million salespeople, brokers, and channel representatives have their sales performance managed by Callidus Software’s products.

© 1998-2007 Callidus Software Inc. All rights reserved. Callidus Software, the Callidus Software logo, Callidus TrueAnalytics, TrueComp, TrueComp Grid, TrueComp Manager, TrueConnection, TrueFoundation, TrueInformation, TruePerformance, TruePerformance Index, TruePerformance Indicator, TrueMBO, TrueAllocation, TrueProducer, TrueQuota, TrueReferral, TrueResolution, and TrueService+ are trademarks, servicemarks, or registered trademarks of Callidus Software Inc. in the United States and other countries. Apple and iPhone are trademarks of Apple. All other brand, service or product names are trademarks or registered trademarks of their respective companies or owners.

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Press Contacts:

Jock Breitwieser
Callidus Software Inc.
Tel: +1 408 9756683
Email: pr@callidussoftware.com

Sam Grace
Rainier PR
Tel: +44 (0) 20 7494 6593
Email: sgrace@rainierpr.co.uk

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