**UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549**

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**FORM 20-F/A**

| **** | **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES EXCHANGE ACT OF 1934** |   |
|------|-----------------------------------------------------------------------------------------|--------|

**For the fiscal year ended December 31, 2003**

**Commission file number: 000-30078**

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**WAVECOM S.A.**(Exact name of Registrant as specified in its charter)

**France**(Jurisdiction of Incorporation or Organization)

**3, esplanade du Foncet92442 Issy-les-Moulineaux Cedex,FranceTel. 011 33 1 46 29 08 00**(Address of Principal Executive Offices)

**Securities registered or to be registered pursuant to Section 12(b) of the Act:**

None

**Securities registered or to be registered pursuant to Section 12(g) of the Act:**

| **Title of each class**                                                                                                                                                                                                                  |   | **Name of each exchange on which  registered** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|
|                                                                                                                                                                                                                                          |   |                                                |
| **Shares, nominal value €1.00 each*American Depositary Shares, evidenced byAmerican Depositary Receipts, each representing one Share.**                                                                                             |   | **NASDAQ National Market**                     |
|                                                                                                                                                                                                                                          |   |                                           |
| * The Shares are      not traded on the NASDAQ National Market but are registered only in connection      with the registration of American Depositary Shares pursuant to the requirements    of the Securities and Exchange Commission. |

 

**Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:**

None

**The number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.**

|   | Shares (including 156,345 shares of treasury stock) | 15,342,789 |   |
|--------|-----------------------------------------------------|------------|--------|
|   | American Depositary Shares                          | 2,286,161  |   |

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 

Yes     No 

**Indicate by check mark which financial statement item the Registrant has elected to follow.**

Item 17     Item 18 

 

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**TABLE OF CONTENTS**

| **Explanatory Note** |   | 3                                            |
|----------------------|--------|----------------------------------------------|
|                 |
| **PART I**           |
| Item 3:              |   | Key Information                              |   | 4 |
| Item 5:              |   | Operating and Financial Review and Prospects |   | 10 |
|                 |   |                                         |   |   |
| **PART III**         |
| Item 18:             |   | Financial Statements                         |   | F-1 |
| Item 19:             |   | Exhibits                                     |   | E-1 |

2   Wavecom Annual Report Form 20-F/A 2003

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**EXPLANATORY NOTE**

This Annual Report on Form 20-F/A (the “Form 20-F/A”)  amends Items 3, 5, and 18 of the Annual Report on Form 20-F filed by Wavecom on April 16, 2004, to reflect the restatement of financial information for the year ended and at December 31, 2003.  See Note 16 to the consolidated financial statements included elsewhere in this Annual Report on Form 20-F/A.

During the process of closing its financial statements for the year ended December 31, 2004, we identified an error in accounting related to the valuation allowance on our deferred tax assets for fiscal year 2003.  The adjustments in our restated financial statements reflect an increase of €5.26 million in income tax expense for fiscal year 2003.  The net result for the year ended December 31, 2003 has been restated to a net loss of €31.1 million from the previously published net loss of €25.9 million. The shareholders’ equity has been restated to €137.3 million from the previously published €142.6 million.  

|   | This Form 20-F/A makes the following amendments: |
|--------|--------------------------------------------------|

|        |   |                                                                                                                                                                               |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        | • | Item 3. Key information – Selected Financial Data:  Financial information for the year ended and at December 31, 2003, is amended to reflect the restatement described above. |
|   |   |                                                                                                                                                                               |

|        | • | Item 5 .Operating and Financial Review and Prospects: |
|--------|--------|-------------------------------------------------------|
|   |   |                                                  |

|  |  |   | o | Results of Operations – Fiscal year 2003 compared to fiscal year 2002 – Other income (expenses).  Information under the caption “Income tax expense (benefit)” is amended to reflect the restatement described above. |
|--|--|--------|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |  |   | o | Selected quarterly operating results.  The financial information for the three months ended June 30, 2003, is amended to reflect the restatement described above. |
|--|--|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |  |   | o | Liquidity and capital resources. As a result of this restatement, and due to a balance-sheet reclassification, our current assets have been increased by €1.1 million resulting in an increase of our working capital (defined as current assets less current liabilities). |
|--|--|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  |   |                                                                                                                                                                                                                   |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | • | Item 18 : Financial Statements.  The financial statements filed pursuant to Item 18, and Note 10 thereto, are amended to reflect the restatement described above and presented in Note 16 to the financial statements. |

Other than the foregoing Items and    the conforming changes related thereto, this Form 20-F/A does not amend,    update or restate any other Items or sections of the Form 20-F originally    filed for the year ended December 31, 2003. This Form 20-F/A does not reflect    events occurring after the filing of the Form 20-F on April 16, 2004. The    filing of this form 20-F/A should not be understood to mean that any other    statements contained in the Form 20-F are true or complete as of any date    subsequent to April 16, 2004. Investors should not rely upon this amendment    as a reaffirmation or reiteration of forward-looking statements that were    made in the original filing and are reprinted in thisamendment.

Wavecom Annual Report Form 20-F/A 2003   3

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**PART I**

**Item 3. Key Information**

**Selected Financial Data**

The following selected financial data for the five years ended December 31, 2003 are derived from the consolidated financial statements of Wavecom, which have been prepared in accordance with U.S. GAAP and have been audited by Ernst & Young Audit, independent auditors. The data should be read in conjunction with "Operating and Financial Review and Prospects," the consolidated financial statements, related notes and other financial information included in this annual report. 

|                                                                                 |   |   | **Years ended          December 31,**                          |   |
|--------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------|--------|
|                                                                                 |   |        |                                                                     |   |
|                                                                                 |   |   | **1999**                                                            |   |   | **2000** |   |   | **2001** |   |   | **2002** |   |   | **2003 restated (1)** |   |
|                                                                                 |   |        |                                                                     |   |  |  |   |  |  |   |  |  |   |  |  |   |
|                                                                                 |   |   | **(in thousands,          except for share and per share amounts)** |   |
| **Consolidated statements of operations data:**                                      |   |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues:                                                                            |   |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Product sales                                          |   | € | 34,563                                                              |   | € | 63,055 |   | € | 317,571 |   | € | 549,543 |   | € | 271,773 |   |
|      Technology development and other services              |   |   | 1,853                                                               |   |   | 2,518 |   |   | 5,093 |   |   | 1,546 |   |   | 3,855 |   |
|      License fees and royalties                             |   |   | 144                                                                 |   |   | — |   |   | — |   |   | — |   |   | — |   |
|                                                                                 |   |        |                                                                     |   |  |  |   |  |  |   |  |  |   |  |  |   |
|           Total revenues           |   |   | 36,560                                                              |   |   | 65,573 |   |   | 322,664 |   |   | 551,089 |   |   | 275,628 |   |
| Cost of revenues:                                                                    |   |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Cost of goods sold                                     |   |   | 26,236                                                              |   |   | 51,457 |   |   | 254,658 |   |   | 371,919 |   |   | 168,465 |   |
|      Cost of services                                       |   |   | 2,148                                                               |   |   | 4,522 |   |   | 4,718 |   |   | 4,709 |   |   | 4,704 |   |
|                                                                                 |   |        |                                                                     |   |  |  |   |  |  |   |  |  |   |  |  |   |
|           Total cost of revenues   |   |   | 28,384                                                              |   |   | 55,979 |   |   | 259,376 |   |   | 376,628 |   |   | 173,169 |   |
|                                                                                 |   |        |                                                                     |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Gross profit                                                                         |   |   | 8,176                                                               |   |   | 9,594 |   |   | 63,288 |   |   | 174,461 |   |   | 102,459 |   |
| Operating expenses:                                                                  |   |   |                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Research and development                               |   |   | 11,913                                                              |   |   | 16,133 |   |   | 32,634 |   |   | 64,093 |   |   | 62,123 |   |
|      Sales and marketing                                    |   |   | 3,412                                                               |   |   | 5,836 |   |   | 12,416 |   |   | 26,600 |   |   | 27,766 |   |
|      General and administrative                             |   |   | 3,070                                                               |   |   | 5,598 |   |   | 13,297 |   |   | 26,163 |   |   | 39,141 |   |
|      Amortization and impairment of goodwill                |   |   | —                                                              |   |   | 47 |   |   | 278 |   |   | — |   |   | 4,244 |   |
|      Deferred compensation amortization                     |   |   | 1,608                                                               |   |   | 1,758 |   |   | 1,711 |   |   | 1,587 |   |   | 205 |   |
|      Provision for loss–ICO Development contract       |   |   | 2,607                                                               |   |   | — |   |   | — |   |   | — |   |   | — |   |
|                                                                                 |   |        |                                                                     |   |  |  |   |  |  |   |  |  |   |  |  |   |
|           Total operating expenses |   |   | 22,610                                                              |   |   | 29,372 |   |   | 60,336 |   |   | 118,443 |   |   | 133,479 |   |
|                                                                                 |   |        |                                                                     |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Operating income (loss)                                                              |   |   | (14,434                                                             | )      |   | (19,778 | ) |   | 2,952 |   |   | 56,018 |   |   | (31,020 | ) |
| Interest and other financial income (expense), net                                   |   |   | (207                                                                | )      |   | 3,734 |   |   | 3,969 |   |   | (7,698 | ) |   | 702 |   |
| Provision for loss on long-term investment                                           |   |   | —                                                              |   |   | — |   |   | (716 | ) |   | — |   |   | — |   |
| Beneficial conversion feature of convertible debt                                    |   |   | (1,072                                                              | )      |   | — |   |   | — |   |   | — |   |   | — |   |
| Income (loss) before minority interests    and income taxes                          |   |   | (15,713                                                             | )      |   | (16,044 | ) |   | 6,205 |   |   | 48,320 |   |   | (30,318 | ) |
|                                                                                 |   |        |                                                                     |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Minority interest                                                                    |   |   | —                                                              |   |   | 6 |   |   | 804 |   |   | 323 |   |   | (38 | ) |
|                                                                                 |   |        |                                                                     |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Income (loss) before income taxes                                                    |   |   | (15,713                                                             | )      |   | (16,038 | ) |   | 7,009 |   |   | 48,643 |   |   | (30,280 | ) |
| Income tax expense (benefit)                                                         |   |   | (736                                                                | )      |   | (1,534 | ) |   | (2,299 | ) |   | 6,556 |   |   | 861 |   |
|                                                                                 |   |        |                                                                     |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Net income (loss)                                                                    |   | € | (14,977                                                             | )      | € | (14,504 | ) | € | 9,308 |   | € | 42,087 |   | € | (31,141 | ) |
|                                                                                 |   |        |                                                                     |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Basic net income (loss) per share(2)                                                 |   | € | (1.26                                                               | )      | € | (1.03 | ) | € | 0.63 |   | € | 2.82 |   | € | (2.06 | ) |
| Diluted net income (loss) per share                                                  |   | € | (1.26                                                               | )      | € | (1.03 | ) | € | 0.61 |   | € | 2.74 |   | € | (2.06 | ) |
| Cash dividends declared per share(3)                                                 |   |   | —                                                              |   |   | — |   |   | — |   |   | — |   |   | — |   |
| Number of shares used in computing basic net income (loss) per share                 |   |   | 11,922,770                                                          |   |   | 14,081,178 |   |   | 14,726,647 |   |   | 14,943,048 |   |   | 15,098,795 |   |
| Number of shares used in computing diluted net income (loss) per share               |   |   | 11,922,770                                                          |   |   | 14,081,178 |   |   | 15,359,226 |   |   | 15,348,985 |   |   | 15,098,795 |   |

*(1),(2),(3) Note appear on following page*

4   Wavecom Annual Report Form 20-F/A 2003

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|                                 |   |     | **December 31** |     |
|--------------------------------------|--------|----------|----------------------|----------|
|                                 |   |          |                      |     |
|                                 |   | **1999** |                 | **2000** |   | **2001** |   | **2002** |   | **2003 restated          (1)** |   |
|                                 |   |          |                      |     |  |  |   |  |  |   |  |  |   |  |  |   |
| **Consolidated balance sheet data:** |   |     |                 |     |   |   |   |   |   |   |   |   |   |   |   |   |
| Total current assets                 |   | €   | 34,957               |     | € | 138,323 |   | € | 227,028 |   | € | 270,308 |   | € | 211,542 |   |
| Total assets                         |   |     | 41,462               |     |   | 158,298 |   |   | 259,947 |   |   | 332,034 |   |   | 275,228 |   |
| Total current liabilities            |   |     | 15,927               |     |   | 48,957 |   |   | 137,064 |   |   | 164,890 |   |   | 131,203 |   |
| Total long-term liabilities          |   |     | 879                  |     |   | 166 |   |   | 638 |   |   | 287 |   |   | 6,692 |   |
| Total shareholders' equity           |   |     | 24,656               |     |   | 108,010 |   |   | 121,884 |   |   | 166,819 |   |   | 137,333 |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    | Income tax expense (benefit), Net income (loss), Basic net income (loss) per share, Diluted net income (loss) per share, Total current assets, Total assets and Total shareholders’ equity for the year ended and at December 31, 2003, have been restated to correct an error in the accounting related to the valuation allowance on our deferred tax assets for the year ended December 31, 2003. See Note 16 to the financial statements included elsewhere in this Annual Report. |

|   |                                                                                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)    | Net income (loss) per share amounts are computed using the weighted average number of shares outstanding. It excludes options and warrants, and reflects only the actual ordinary shares outstanding. |

|   |                                                                                       |
|--------|--------------------------------------------------------------------------------------------|
| (3)    | We do not expect to pay any cash dividends        on our shares in the foreseeable future. |

**Exchange Rate Data**

Since January 1, 1999 our functional currency has been the euro, the currency of the European Monetary Union, of which the Republic of France is a member. The exchange rate for conversion of euros into U.S. dollars (using the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York) on April 13, 2004 was $1.1923 = €1.00. Fluctuations in the exchange rate between the euro and the dollar will affect the dollar amounts received by owners of ADSs on conversion of dividends, if any, paid in euro on the shares and may affect the dollar price of the ADSs on the Nasdaq National Market. 

The following table shows the noon buying rates for the number of U.S. dollars per euro for the period since January 1, 1999. The average is computed using the noon buying rate on the last business day of each month during the period indicated. 

| **Month**                              |   |   | **High** |   |   | **Low** |   |
|----------------------------------------|--------|--------|----------|--------|--------|---------|--------|
|                                        |   |        |          |   |        |         |   |
| **2004**                               |   |   |     |   |   |    |   |
|      March    |   |   | 1.2431   |   |   | 1.2088  |   |
|      February |   |   | 1.2848   |   |   | 1.2426  |   |
|      January  |   |   | 1.2853   |   |   | 1.2389  |   |
| **2003**                               |   |   |     |   |   |    |   |
|      December |   |   | 1.2597   |   |   | 1.1956  |   |
|      November |   |   | 1.1995   |   |   | 1.1417  |   |
|      October  |   |   | 1.1833   |   |   | 1.1596  |   |

| **Year ended December 31,**                                      |   |   | **Average** |   |
|------------------------------------------------------------------|--------|--------|-------------|--------|
|                                                                  |   |        |             |   |
|           2003 |   | $      | 1.1315      |   |
|           2002 |   |   | 1.0485      |   |
|           2001 |   |   | 0.8952      |   |
|           2000 |   |   | 0.9234      |   |
|           1999 |   |   | 1.0667      |   |

Wavecom Annual Report Form 20-F/A 2003   5

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**Risk Factors:**

*In      addition to the other information contained in this annual report, the      following risk factors should be carefully considered in evaluating us      and our business. These statements are intended to highlight the material      risk factors that may affect our results.*

**Intense competition from companies      in both the wireless device sector and the semiconductor sector could reduce      our market share in all of our geographic markets and reduce our revenues**

The    market for wireless core technology is fragmented but intensely competitive.    We currently compete in different segments of the market with different types    of suppliers. In the market to supply core technology to telephone handset    manufacturers, we compete primarily with major international semiconductor    companies. In the vertical applications markets, we compete with a broad    array of companies, from manufacturers of integrated wireless modules and    modems to specialist designers. We expect competition to intensify, especially    in the vertical applications markets, as growth in these markets attractsadditional participants.

Many    of our competitors operate their own fabrication facilities and have longer    operating histories and presence in key markets, greater name recognition,    a larger customer base and significantly greater financial, sales and marketing,    manufacturing, distribution, technical and other resources than we do. These    competitors may be able to adapt more quickly to new and emerging technologies    and changes in customer requirements, and they may also be able to devote    greater resources to the promotion and sale of their products. In addition,    current and potential competitors have established or may establish financial    or strategic relationships among themselves or with existing or potential    customers, resellers or other third parties. New competitors, or alliances    among competitors, could emerge and rapidly acquire significant market share.    Existing or new competitors may also develop technologies that more effectively    address our markets with products that offer enhanced features and functionality,    lower power requirements, greater levels of integration or lower cost. Competition    has forced us to reduce the average selling prices for some of our products,    and we expect such price reductions to continue in the future. Competition    may also result in reduced gross margins and loss of market share in certain    markets. We cannot assure you that we will be able to continue to compete    successfully or that competitive pressures will not materially and adverselyaffect our business, financial condition and results of operations.

**Declining sales prices of personal      communication devices, such as mobile telephones, and other wireless products      could affect our operating results adversely**

The    prices of mobile telephones decreased rapidly during 2003. We believe that    the prices of other wireless communications products will also decrease over    time. As a result, prices for our Wismo modules, wireless modems and component    solutions have declined and are likely to continue to decline at an accelerated    pace in the years to come. More importantly, in order for us to address a    larger market, and in order for our customers to introduce attractively priced    products, we believe we must continue to reduce our selling prices. We will    be unable to return to profitability unless we can offset these price decreaseswith increases in unit volumes and reductions in per unit costs.

**We rely on a small number of major      customers. The loss of one or more of these customers, or a reduction of      purchases by one or more major customers, may adversely affect our sales,      operating results and cash flows**

Although    the global handset market experienced significant growth worldwide in 2003,    we experienced declining revenues during this period as the market for mobile    telephones in East Asia, and particularly in China, was flooded with low-end    products. Although our customers in the East Asian market have been particularly    successful in building market share in that expanding market, many of their    product offerings address the lower end of the market and do not incorporate    our products or technology. The revenue decline that we experienced in 2003    may continue if the Chinese and other markets in which our customers sell    their products should experience a downturn; if our customers are unable    to remain competitive and increase their market share in their local markets;    if they decrease sales of products based on our offering; if we are unable    to win new customers or if we are unable to significantly lower our pricesto compete with other suppliers.

In    2003 we were able to achieve a more balanced portfolio among our customers    and within our geographic regions, but overall revenues for the year were    significantly lower than revenues in 2002. The dynamics of the personal communication    device markets and vertical markets in Europe, the Americas and Asia are    all very different, and we cannot assure you that the strategies that enabled    us to grow quickly in the Asian handset supply market in the past will workin those other markets, or that we will be successful in serving those markets.

6   Wavecom Annual Report Form 20-F/A    2003

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The    following table sets forth revenues from our largest customers for the pastthree years:

|                                                                          |   |   | **2001** |   |   | **2002** |   |   | **2003** |   |
|-------------------------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
|                                                                          |   |   |          |   |   |          |   |   |          |   |
| Percentage of total revenues        represented by the five largest customers |   |   | 80.4%    | *      |   | 83.9%    | **     |   | 63.3%    | ***    |
| Percentage of total revenues        represented by the ten largest customers  |   |   | 88.1%    |   |   | 90.1%    |   |   | 76.0%    |   |

|        |
|--------|
| *      | In 2001, sales to Sewon Telecom        represented 35.4% of total revenue; sales to Amtal International Ltd.,        agent for TCL Mobile Communication (HK) Company Ltd., represented        32.9% of total revenue. |
|   |   |

| **     | In 2002, sales to TCL Mobile        Communication, either directly or through Amtal International Ltd.,        represented 67% of total revenue. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                  |

| *** | In 2003, three customers represented        more than 10% of sales: TCL (19.4%), Soutec (18.3%) and Intercel, a Hong        Kong-based distributor (12.1%). |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Significant cancellations or deferrals      of orders could adversely affect our business**

We    sell products pursuant to advance purchase orders that customers may be allowed    to cancel or defer on short notice, at our discretion, sometimes without    incurring a significant penalty. Significant deferrals have in the past,    and may again in the future, result in shortfalls from expected revenues    in a fiscal quarter or fiscal year. Significant cancellations could materially    and adversely affect our business, financial condition and results of operations.    If we experience significant order cancellations or deferrals, or if we overstock    products in anticipation of orders that fail to materialize, or if we accept    the return of previously sold products, we may end up with excess or obsolete    inventory, which could reduce our profit margins and result in inventorywrite-offs.

**We operated at a loss during 2003.      As a result, our cash reserves were reduced. If we continue to operate      at a loss our cash reserves will continue to decrease which could result      in our major suppliers requiring different payment terms or bank guarantees**

Our    company is "fabless," which means it operates without factories.    As a result, our capital expenditures are relatively low and our main cash    flows come from, and are used in, operations. During 2003 we experienced    negative cash flows from operations. Our cash reserves as of December 31,    2002 were €135 million and as of December 31, 2003 were €111 million.    If we continue to operate at a loss, our main suppliers, specifically the    contract manufacturers who make our products, may require us to have stricter    payment terms or may eventually require us to provide bank guarantees or    letters of credit, which would have a negative impact on our cash flows.    Based on our current plans, we believe that our available capital resources    will be adequate to satisfy our cash requirements for at least 12 months    from the date of this report. If our plans change, or if we do not achieve    profits or if our profits are significantly lower than anticipated, we mayneed additional funding to remain in business.

**The wireless communication market      in which we operate is characterized by rapidly changing and increasingly      complex technologies. If we are unable to keep pace with these new technology      trends, our product offerings may not remain competitive and we may lose      customers**

The    markets in which we sell our wireless solutions are developing new types    of products and new versions of existing products regularly. To be competitive,    manufacturers who purchase our Wismo modules and wireless modems for use    in their mobile telephones and other applications must offer products that    satisfy consumer demand for smaller, less expensive products with more features.    To meet our customers' needs, we must continuously update and enhance our    products, shortening their life cycles so that they meet the latest standardsand include up-to-date features.

To    develop these enhancements, new designs and technologies, we must spend time    and significant amounts of money on research and development. These investments    are generally made before commercial viability for such enhanced products    is ensured and we may not receive any significant revenues from these products    if we misjudge the market or miss a product life-cycle window. We intend    to introduce our own chipset solutions during 2004, to be commercialized    under the name WISMO Flex, and cannot assure you that these products will    be commercially successful. We may lose market share if our competitors,    most of which are larger and have greater resources than we do, are moresuccessful or faster than we are in updating and improving products and technology.

Wavecom Annual Report Form 20-F/A    2003   7

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In    addition, several of our products rely on unproven or evolving technologies    that may contain defects or other quality or performance problems, whichmay harm our reputation and increase our costs.

**Our sales and operating results      could be adversely affected if the third parties on whom we rely for the      supply, assembly and manufacture of our components and finished products      are unable to meet our supply, quality or manufacturing requirements**

We    rely primarily on third parties to supply components for our products andto assemble and to test our products.

Through    the end of 2003, we relied on three separate contract manufacturers to produce    our modules and modems. In October of 2003 we made the decision to concentrate    all manufacturing with a single contract manufacturer. We chose Solectron,    using its plant in Suzhou, China. We will be consolidating the production    of all of our modules and modems at this new site during 2004. If this transfer    is not done in a timely and successful manner or if the actual costs are    higher than anticipated or if this transfer causes disruption to our operations,    our revenues and profitability could suffer. Although we believe the use    of a single contract manufacturer will help us to reduce costs and improve    controls over the manufacture of our products, reliance on a single manufacturerwill increase the risk that we could encounter manufacturing or supply problems.

Using    third parties to manufacture key components of our products and to assemble    and test our products reduces our control over product delivery schedules,    quality assurance, manufacturing yields and costs. The third parties who    manufacture, assemble and test our components and our products have other    customers and may not have sufficient capacity to meet all of our supply,    manufacturing, assembly and testing needs during periods of excess demand.    They may experience financial difficulties, or delays or disruption to their    production, or may fail to meet our specified requirements, notably our qualitystandards.

We    believe that a number of our suppliers are sole sources for key components.    These key components are complex and difficult to manufacture and require    long lead times. We work with our suppliers on a twelve-month rolling forecast    basis and we currently believe that we have secured an adequate supply based    on our production forecasts for the next twelve months. To reduce such uncertainty,    we have developed a proprietary baseband chipset and intend to continue developing    other key components for our products, but we still run a risk in subcontracting    the production of these chipsets. In the event of a reduction or interruption    of supply, or a degradation in quality, it could take several months before    we could begin receiving adequate supplies from alternative sources. Supply    interruptions could delay product shipments, causing our revenues to declineand operating results to suffer.

**Fluctuations in the rate of exchange      between our reporting currency, the euro, and the U.S. dollar can affect      our net sales and costs**

Although    the functional currency of Wavecom S.A. is the euro, a significant portion    of our revenues is recorded in U.S. dollars. At the same time, most of our    components are purchased in U.S. dollars and a portion of our operating expenses    is in U.S. dollars. The value of the euro increased significantly against    the dollar throughout 2003. A further strengthening of the euro against the    U.S. dollar could reduce our reported revenues and negatively affect ourreported operating and net results.

We    incurred foreign exchange losses in 2002 and 2003 and we may incur such losses    again in the future. Beginning in January 2003, we put in place a program    to hedge our currency risk through the use of forward contracts and put and    call options, covering expected net cash flows in U.S. dollars. The objective    of this program is to minimize our risk, but we will never be able to eliminatethe risk.

**We need to attract, retain and      develop key personnel who are skilled in our business and technology to      remain competitive and properly manage our growth**

It    is important to our success that we retain our highly skilled product development,    sales, marketing and other key employees, and continue to attract and motivate    additional skilled employees. We rely to a large extent on independent contractorswho work for consulting firms.

In    January 2004 we announced a plan to restructure our business organization,    which is expected to result in significant headcount reductions throughout    our company. If we fail to complete the restructuring properly, we may lose    personnel, either voluntarily or involuntarily, whose contributions are needed    for the development, sales and marketing of our current and future products.    This headcount reduction may also make it more difficult for us in the future    to attract and retain the personnel needed for growth. If we fail to attract,    hire or retain appropriately qualified personnel, we could experience delays    in our research and development projects or our product roll-outs which could    affect our ability to bring new products to market successfully or on a timelybasis.

8   Wavecom Annual Report Form 20-F/A    2003

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Changes    in our market and in our business organization have placed a significant    strain on our management systems and resources. In order to manage these    changes, and to successfully restructure our business, we will need to modify    our internal systems, controls and procedures, improve coordination among    departments and better manage our workforce. If we fail to effectively face    changes in our markets and manage our business to address the above concerns,our operating results could suffer and we may be unable to expand our business.

**Destabilizing events in Asia,      particularly in China, could hurt our revenues**

In    2001, 2002 and 2003, sales to Asian customers represented 84%, 82% and 69%,    respectively, of revenues, reflecting shipments pursuant to large contracts    with customers in China, Taiwan and South Korea. We expect that, for the    foreseeable future, a significant portion of our revenues will be generated    from Asian customers, and in particular from customers based in China orserving the Chinese market.

The    outbreak of the SARS virus in parts of China caused travel and business disruption    throughout Asia during much of 2003. In response to the outbreak, we curtailed    business travel between our European and Asian offices. Personnel shortages    and logistics problems resulting from the outbreak caused delays in deliveries    of vital electronic components from Asia to many companies worldwide, and    impaired their ability to meet commitments to their own customers. While    the SARS outbreak did not directly affect production of our products or delivery    of components to our contract manufacturers' facilities, a protracted or    more widespread epidemic of the SARS virus, or of "bird flu" or    another communicable disease, could affect the production or the distributionof our products, which could materially harm our business.

Similarly,    a financial crisis in Asia, particularly in China, could substantially reduce    our revenues from Asian customers or customers selling to end users in Asia.    Political upheaval in China or a change in the political climate, making    China a less favorable environment for foreign businesses, could also substantiallyreduce our revenues.

**Our costs may increase or we may      have to redesign our products if they infringe other companies' intellectual      property rights**

Other    companies have patents, copyrights, trade secrets and other intellectual    property rights covering technology used in the wireless communications industry.    Although we have entered into intellectual property licenses permitting us    to use rights of third parties, if any of our products were found to infringe    on protected technology, we could be required to redesign them, to obtain    further intellectual property licenses or to pay royalties or damages to    the owner of the technology. The resulting costs would harm our business.    If we were unable to obtain these licenses or to redesign our products tomake them non-infringing, we could be prohibited from marketing our products.

**Our business could be hurt by      the unauthorized use of our technology**

We    rely on a combination of patents, copyrights, trade secrets, trademarks and    proprietary information to maintain and enhance our competitive position.    If we were unable to prevent a competitor from using our designs and techniquesto produce competing products, our business would be adversely affected.

**Our quarterly revenues fluctuate      significantly and may affect the price of our shares and ADSs**

Our    revenues and operating results fluctuate significantly from quarter to quarter.The many factors that could cause our quarterly results to fluctuate include:

|   | • | any delay in our introduction        of new products or product enhancements; |
|--------|--------|-------------------------------------------------------------------------------|
|   |   |                                                                          |

|   | • | the size and timing of customer        orders and our product shipments; |
|--------|--------|--------------------------------------------------------------------------|
|   |   |                                                                     |

|   | • | any delay in shipments caused        by component shortages or other manufacturing problems; |
|--------|--------|----------------------------------------------------------------------------------------------|
|   |   |                                                                                         |

|   | • | the loss of a major customer        or a reduction in purchases by a major customer; |
|--------|--------|--------------------------------------------------------------------------------------|
|   |   |                                                                                 |

|   | • | a reduction in the selling        price of our products; |
|--------|--------|----------------------------------------------------------|

Wavecom Annual Report Form 20-F/A    2003   9

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|   | • | the impact of seasonal variations        in demand linked to the timing of holiday buying seasons, such as the        Chinese New Year; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                    |

|   | • | customer responses to announcements        of new products and product enhancements by our competitors; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                        |

|   | • | foreign exchange rate fluctuations,        primarily between the euro and the US dollar. |
|--------|--------|------------------------------------------------------------------------------------------|

Due    to these and other factors, our results of operations could fluctuate substantially    in the future and quarterly comparisons may not be reliable indicators of    future performance. Because many of our expenses for personnel, facilities    and equipment are relatively fixed in nature, we may not be able to reduce    expenses quickly to balance a decline in our revenues and could experience    net losses during extended periods. Quarterly fluctuations may have a negative    effect on the price of our shares and ADSs. It is possible that in some future    quarter our results of operations will be below the expectations of public    market analysts and investors, in which case the price of our shares and    ADSs could fall.

**Our U.S. shareholders could suffer      adverse tax consequences if we are characterized as a passive foreign investment      company**

If,    for any taxable year, our passive income or our assets that produce passive    income exceed levels provided by law, we may be characterized as a passive    foreign investment company, or PFIC, for U.S. federal income tax purposes.    This characterization could result in adverse U.S. tax consequences to our    shareholders who are subject to U.S. taxation. U.S. persons should consult    with their own U.S. tax advisors with respect to the U.S. tax consequences    of investing in our shares or our ADSs. See "Item 10–Additional    Information–Taxation–United States Taxation–Passive ForeignInvestment Company".

**We may not be able to sell our      products under the Wavecom name or use the trademark "WISMO" in      certain countries**

Several    companies, some of which are in businesses similar to our own, use the word    Wavecom or a similar word as either a trade name or as a brand name for their    products, in particular in the United States. This could cause confusion    in the marketplace and harm our sales. If one of these other companies were    to take effective legal action to prohibit us from continuing to use the    name Wavecom, we could be forced to use a different name and, as a result,    it would be more difficult for customers to identify us and our sales might    suffer. The trademark WISMO may not be protected in some countries where    we do business. Use of the trade name WISMO was opposed in certain countries    and if these opponents succeed we may be prohibited from using this tradename in certain jurisdictions.

**Adherence to technical requirements      or legal regulations may increase our cost base**

The    implementation of new technical requirements or legal or environmental regulations,    such as the European Union's recent directive mandating recycling of used    electronic components, may adversely affect the timing and costs of introduction    of our products. This could ultimately impair the success of our businesseven though these regulations may not directly apply to us or our industry.

**Events anticipated in forward-looking      statements in this annual report may not occur**

This    annual report contains forward-looking statements that involve risks and    uncertainties. These forward-looking statements are usually accompanied by    words such as "believe,""anticipate,""plan,""expect" and    similar expressions. Our actual results may differ materially from those    anticipated in these forward-looking statements as a result of a number of    factors, including the risks that we face, described above and elsewherein this annual report.

**Item 5. Operating and Financial      Review and Prospects**

*The      following discussion of our financial condition and results of operations      should be read in conjunction with our consolidated financial statements      and the related notes, and the other financial information included elsewhere      in this annual report. Our consolidated financial statements and our quarterly      financial results included in this discussion have been prepared in accordance      with U.S. GAAP. This discussion includes forward-looking statements based      on assumptions about our future business. Our actual results could differ      materially from those contained in the forward-looking statements.*

10   Wavecom Annual Report Form 20-F/A    2003

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|   | ***Background*** |
|--------|------------------|

The wireless communication sector      in which we operate is extremely fast-paced and dynamic, with many types      of competitors, both large and small. We address two main markets, the      personal communication device (PCD) market for mobile telephones, connected      personal digital assistants and smartphones, and the highly segmented market      for vertical applications which covers a wide variety of end-products that      incorporate the wireless communication function, including automobile dashboards,      wireless local loop for fixed-wireless telephones, utility meters, vending  machines, and payment and security systems.

In 2001 and 2002, our significant      revenue growth was driven primarily by a rapidly expanding market for mobile      telephones in China and the success of a small number of key customers.      Our technology was adopted by a major Chinese mobile telephone manufacturer      as well as a number of other Chinese and Korean companies whose target      market was China. At that time, most of these companies had a small number      of research and development engineers and therefore found that our solutions,      which came in the form of modules, could be quickly and easily designed      into mobile telephones. Throughout 2001 and 2002, our solutions enabled      these Asian manufacturers to rapidly take market share in the Chinese market,      which previously had been dominated by foreign manufacturers. Because our      solutions include all the technology necessary for wireless communications      in a pre-packaged form, our price points were generally higher than those      of our competitors, who were selling reference designs built around a few      key components that were mainly used to design low-feature, low-cost telephones.      As a consequence, our products were most often designed into our customers'      high-end feature-rich phones and not in low-end products. During 2003,      the Chinese market for mobile telephones began to expand and reach some      of the inland regions where consumers' incomes are generally lower than      in the more affluent coastal regions. From these new consumers, there was      increasing demand for the low-priced, entry-level products that our solutions      did not address. In addition, our customers faced mounting competition      from both Chinese and foreign telephone manufacturers, and taking market      share became increasingly difficult for them. The cost of our products      was too high to be an optimal solution for our main Asian handset customers,      who had driven our sales growth during 2001 and 2002. As a result, they      turned to other suppliers and our revenues from this market and overall  profitability declined sharply compared to 2002.

In response to requests from our      Asian handset customers, we developed and introduced a new product line      called the WISMO Flex. We believe that this solution, which will be priced      in line with our competitors' products, competes more directly with reference      design chipset vendors who are the major suppliers to mobile phone manufacturers      in both Europe and Asia. A number of our existing customers have already      allocated resources, including R&D teams, to design a variety of new      phone models around this platform. The WISMO Flex is expected to be available      in volume during the second half of 2004 and is intended to address a large      scope of handsets, with feature-rich multimedia functions at competitive  prices.

We saw our customer portfolio become      more balanced, although on a smaller base, in 2003 compared to 2002 and      2001, when our revenues came mainly from a few Asian mobile telephone manufacturers.      For the full year 2003 our top ten customers represented 76% of revenues      compared to 90% in 2002 and 88% in 2001. In addition, in 2003, no single      customer represented more than 20% of revenues while in 2002 one customer      represented 67% and in 2001 one customer represented 35% and another represented      33% of total revenues. Our customer portfolio in 2003 was also more balanced      in terms of our target markets as sales for use in personal communication      devices (PCD) represented 52% of our revenues (with 48% from vertical applications)      while in 2002 and 2001 sales for use in PCD applications represented 82%  and 79%, respectively.

The number and volume of products      equipped with wireless connectivity in the vertical markets continue to      grow and we believe we have been keeping pace with this overall market      growth, based on our internal estimates. Our revenues generated from the      vertical markets totaled €130 million in 2003, marking 33% growth      over 2002 when revenues from vertical markets totaled €98 million.  Vertical markets revenues totaled €66 million in 2001.

Based on current revenue forecasts      as of the publication of this report, we expect vertical applications to  contribute more than half of our revenues in 2004.

With the ramp in volumes of our      WISMO Flex solution (by mid-2004) we should see our average selling prices      for use in PCD applications take a substantial step down as compared to      our WISMO Pac and WISMO Quik module solutions (average selling prices for      our modules was €47 in the fourth quarter of 2003). However, from      a margin perspective, we continue to target an overall product gross margin      of around 30%, which is the average of gross margins from our entire range  of WISMO products: WISMO Pac, WISMO Quik and, in the future, WISMO Flex.

Wavecom Annual Report Form 20-F/A    2003   11

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Our customer base is predominantly      international, with the majority of our revenues coming from Asia and from      European customers outside of France, including Germany, Italy, Spain and      the United Kingdom. Revenues from Asia represented 69% of our sales in      2003, 82% of our sales in 2002 and 84% of sales in 2001. In order to better      serve the Asian markets, we established subsidiaries in Hong Kong, and      Seoul; a branch office in Tokyo; and representative offices in Taipei,      and Beijing. We also have subsidiaries based in San Diego, California;      Darmstadt, Germany and Guilford, UK. As Asia, and China specifically, is      expected to remain the major manufacturing hub for most consumer electronics      goods in the future, we expect that this region will remain the source  of the majority of our revenues in the short and long term.

To better address our customers'      needs from both a contact and product standpoint, we established a new      organization structure in early 2004. The new organization is built around      four principal divisions. Two divisions serve as our face to the customer      and include sales, business development, marketing, product management,      engineering and customer support addressing our two key target markets:      PCDs and Verticals. The other two principal divisions are focused on products  and technology.

|   | ***Critical Accounting Judgments            and Estimates*** |
|--------|--------------------------------------------------------------|

We have identified the most critical      accounting principles upon which our financial status depends and that      involve the most complex or subjective judgments and estimates. Our judgment      used to determine the appropriate assumptions and to make estimates is      based on our historical experience, terms of existing contracts, our observation      of trends in the industry, information provided by our customers and information      available from other outside sources. We believe that our most critical  accounting estimates are:

|   | • | *Provision for warranty          services:* We provide for the estimated cost of product warranty          service at the time the revenue is recognized. While we have put in          place extensive product quality programs and processes, our warranty          obligation is affected by product failure rates, our ability to repair          defective products and service delivery costs incurred in correcting          a product failure. Should actual product failure rates, repair rates          or service delivery costs differ from our estimates, revisions to the          estimated warranty accrual would be required. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |

|   | • | *Provision for royalty payment          for intellectual property rights:* Our products are designed to          conform to wireless industry standards which are based on certain patented          technologies that we use. We have concluded license agreements with          six GSM/GPRS patent holders, under which we pay royalties. We are in          the process of negotiating with other patent holders. We record a provision          for royalty payments that we estimate will be due to these patent holders          once we conclude license agreements with them. The provision is based          on a percentage of consolidated product revenues and is recorded at          the time revenue is recognized. Should the actual royalties to be paid          under license agreements signed in the future differ from our estimates,          the royalty provision would have to be revised. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Both of these provisions have an      impact on the determination of cost of goods sold. Both are recorded in "other      accrued expenses" on the balance sheet and are described more fully  in the footnotes to our annual consolidated financial statements.

|   | • | *Provision for obsolete          inventories:* We provide for the estimated loss of value of obsolete          inventories at the time that such inventories are identified as being          at risk of obsolescence. Changes in this provision have an impact on          the determination of cost of goods sold. In determining the risk of          obsolescence for components, we review the estimated need for the components          based on current sales and production forecasts and take into consideration          any planned changes in the architecture of our products which would          cause components on hand to become obsolete. The risk of obsolescence          of finished goods is analyzed based on current sales forecasts, as          well as announced "end-of-life" decisions, which could accelerate          the obsolescence of such products. Should actual sales or production          patterns differ from our forecasts, revisions to the provision for          obsolete inventories would be required. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

|   | • | *Other accruals:* Under        US GAAP, loss contingencies are recognized in accordance with SFAS 5, *Accounting        for Contingencies*. Liabilities are accrued when a loss contingency        is considered to exist and when a loss is considered probable and can        be reasonably estimated. Management makes these estimates primarily with        the analyses of internal specialists, if available, or with the support        of outside specialists, such as actuaries or legal counsel. Revision        of management's estimates of these loss contingencies may significantly        affect future operating results. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

12   Wavecom Annual Report Form 20-F/A    2003

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|   | • | *Allowance for deferred          tax assets:* We estimate our actual current tax exposure, together          with our temporary differences resulting from differing treatment of          items, for tax and accounting purposes. These temporary differences          result in deferred tax assets and liabilities. We must then assess          the likelihood that our deferred tax assets will be recovered from          future taxable income and to the extent we believe that recovery is          not likely, we must establish a valuation allowance. To the extent          we establish a valuation allowance or increase this allowance during          an accounting period, we must include and expense the allowance within          the tax provision in the statement of operations. Significant management          judgment is required in determining our provision for income taxes,          our deferred tax assets and liabilities and any valuation allowance          recorded against our net deferred tax assets. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***International Financial Reporting        Standards (IFRS)***

In July 2002 the European      Commission adopted a directive that will require European companies whose      stocks are traded on the public market (Euronext, for example) to publish      their consolidated financial accounts under IFRS (International Financial      Reporting Standards). In compliance with this regulation, which takes effect      on January 1, 2005, we will begin publishing our consolidated financial      statements in IFRS, rather than in French GAAP. We will continue to publish  our financial statements in accordance with U.S. GAAP as well.

| ***Results of Operations*** |
|-----------------------------|

**Fiscal year 2003 compared to fiscal      year 2002**

|   | ***Revenues*** |
|--------|----------------|
|   |           |

|                                                |   |   | **Year ended    December 31,    2002** |   |   | **% Product    sales** |   |   | **Year ended    December 31,    2003** |   |   | **% Product    sales** |   |   | **Percentage     change     2002/2003** |   |
|-----------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|------------------------|--------|--------|---------------------------------------------|--------|--------|------------------------|--------|--------|-----------------------------------------|--------|
|                                                |   |   |                                             |   |   |                        |   |   |                                             |   |   |                        |   |   |                                         |   |
|                                                |   |   | **(amounts in € 000s)**                |   |
| **Product sales**                                   |   |   |                                        |   |   |                   |   |   |                                        |   |   |                   |   |   |                                    |   |
|      Wismo                 |   |   | 513,405                                     |   |   | 93.4%                  |   |   | 243,843                                     |   |   | 89.7%                  |   |   | –52.5%                             |   |
|      Modem                 |   |   | 36,138                                      |   |   | 6.6%                   |   |   | 27,930                                      |   |   | 10.3%                  |   |   | –22.7%                             |   |
| **     Total    product**  |   |   | **549,543**                                 |   |   | **100.0%**             |   |   | **271,773**                                 |   |   | **100.0%**             |   |   | **–50.5%**                         |   |
| ***Percentage of total revenues***                  |   |   | ***99.7%***                                 | ****   |   |                   |   |   | ***98.6%***                                 | ****   |   |                   |   |   |                                    |   |
| **Services**                                        |   |   | 1,546                                       |   |   |                   |   |   | 3,855                                       |   |   |                   |   |   | 149.4%                                  |   |
| ***Percentage of total revenues***                  |   |   | ***0.3%***                                  | ****   |   |                   |   |   | ***1.4%***                                  | ****   |   |                   |   |   |                                    |   |
| **Total Revenues**                                  |   |   | **551,089**                                 |   |   |                   |   |   | **275,628**                                 |   |   |                   |   |   | **–50.0%**                         |   |
| **Volumes (in 000 of units)**                       |   |   |                                        |   |   |                   |   |   |                                        |   |   |                   |   |   |                                    |   |
|      Wismo                 |   |   | 8,496                                       |   |   | 96.4%                  |   |   | 5,128                                       |   |   | 94.7%                  |   |   | –39.6%                             |   |
|      Modem                 |   |   | 319                                         |   |   | 3.6%                   |   |   | 287                                         |   |   | 5.3%                   |   |   | –10.0%                             |   |
| **     Total unit volume** |   |   | **8,815**                                   |   |   | **100.0%**             |   |   | **5,415**                                   |   |   | **100.0%**             |   |   | **–38.6%**                         |   |

The decrease in product revenues      in 2003 compared to 2002 was due to lower volumes (representing 76% of      the decrease), lower average selling prices (representing 11% of the decrease),      and the decline of the U.S. dollar versus the euro compared to 2002 (representing      13% of the decrease). Nearly all of our sales from Asia-Pacific and the      Americas are denominated in U.S. dollars whereas our reporting currency      is euros. Therefore movements between these two currencies impact our reported      financial results, and accounted for a portion of the revenue decreases      in these two regions. As detailed in the preceding "Background" section,      revenues in the Asia-Pacific region were adversely impacted by events in      the Chinese handset market. The decrease in revenues in the Americas reflected      the absence of any single large customer, compared to 2002 when one large      customer with a personal digital assistant product contributed significantly  to 2002 revenues.

The lower volumes in 2003 resulted      primarily from lower sales to handset customers in the Asia-Pacific region,      as our customers reduced orders in order to control their inventory levels      and as our largest customer began to diversify its sources of supply. The      average selling price of Wismo modules continued to decline. It decreased      by 20% year on year from the fourth quarter of 2002 to the fourth quarter      of 2003, in-line with our management's expectations. Much of this decline      is attributed to the weakening of the United States dollar against the      euro, with an average exchange rate of $1.1287 for €1.00 in 2003 compared  to an average of $0.9552 for € 1.00 in 2002.

Wavecom Annual Report Form 20-F/A    2003   13

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We continued to diversify our customer      portfolio in an effort to reduce our reliance on a small number of major      customers. For the full year 2003, our top ten customers represented 76%      of total revenues, down from 90% for the full year 2002. No single customer      represented more than 21% of revenues in 2003. We also diversified our      sales by market, substantially increasing the percentage of total sales  made to the vertical markets.

Sales by markets:

| **As % of total revenues**                                                                              |   |   | **2002** |   |   | **2003** |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
|                                                                                                         |   |   |          |   |   |          |   |
| PCD (Personal Communication        Devices)                                                             |   |   | 82%      |   |   | 51%      |   |
| Vertical Markets:                                                                                       |   |   |     |   |   |     |   |
|      M2M (Machine to Machine)                         |   |   | 4%       |   |   | 5%       |   |
|      Distributors (selling mainly        to M2M)      |   |   | 11%      |   |   | 31%      |   |
|      Automotive                                       |   |   | 3%       |   |   | 12%      |   |
| Services                                                                                                |   |   | N/S      |   |   | 1%       |   |

Sales by geographic regions:

| **As % of total revenues**     |   |   | **2002** |   |   | **2003** |   |
|--------------------------------|--------|--------|----------|--------|--------|----------|--------|
|                                |   |   |          |   |   |          |   |
| Asia-Pacific                   |   |   | 82%      |   |   | 69%      |   |
| Americas                       |   |   | 5%       |   |   | 3%       |   |
| Europe, Middle East and Africa |   |   | 13%      |   |   | 28%      |   |

Service revenue is generated from      the sale of technical support to our customers to assist them in the integration      of our Wismo module into their products. We offer this service in order      to promote the sales of Wismo modules. We do not consider it to be a stand-alone  business.

|   | ***Cost of revenues*** |
|--------|------------------------|
|   |                   |

|                                                     |   |   | **Year ended    December 31,    2002** |   |   | **% Product     sales** |   |   | **Year ended    December 31,    2003** |   |   | **% Product     sales** |   |   | **Percentage     change    2002/2003** |   |
|----------------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|-------------------------|--------|--------|---------------------------------------------|--------|--------|-------------------------|--------|--------|----------------------------------------|--------|
|                                                     |   |   |                                             |   |   |                         |   |   |                                             |   |   |                         |   |   |                                        |   |
|                                                     |   |   | **(amounts in € 000s)**                |   |
| **Cost of revenues**                                     |   |   |                                        |   |   |                    |   |   |                                        |   |   |                    |   |   |                                   |   |
|      Cost of product            |   |   | 371,919                                     |   |   | 67.7%                   |   |   | 168,465                                     |   |   | 62.0%                   |   |   | –54.7%                            |   |
|      Cost of services           |   |   | 4,709                                       |   |   | 304.6%                  |   |   | 4,704                                       |   |   | 122.0%                  |   |   | –0.1%                             |   |
| **     Total cost of revenues** |   |   | **367,628**                                 |   |   | **68.3%**               |   |   | **173,169**                                 |   |   | **62.8%**               |   |   | **–54.0%**                        |   |
| **Gross Profit**                                         |   |   |                                        |   |   |                    |   |   |                                        |   |   |                    |   |   |                                   |   |
|      On Products                |   |   | 177,624                                     |   |   | 32.3%                   |   |   | 103,308                                     |   |   | 38.0%                   |   |   | –41.8%                            |   |
|      On Services                |   |   | –3,163                                 |   |   | –204.6%            |   |   | –849                                   |   |   | –22.0%             |   |   | –73.2%                            |   |
| **     Total Gross profit**     |   |   | **174,461**                                 |   |   | **31.7%**               |   |   | **102,459**                                 |   |   | **37.2%**               |   |   | **–41.3%**                        |   |

*Cost of goods sold.* Cost      of goods sold consists primarily of the cost of components, our manufacturers'  charges and provisions for royalty and warranty expense.

Our ability to improve gross margin      levels on lower revenues and in the face of declining average selling prices  reflects the following factors:

|   | • | careful management of our        contract manufacturers, |
|--------|--------|----------------------------------------------------------|
|   |   |                                                     |

|   | • | continuing overall favorable        pricing for components, |
|--------|--------|-------------------------------------------------------------|
|   |   |                                                        |

|   | • | ongoing improvements in the        production process, |
|--------|--------|--------------------------------------------------------|
|   |   |                                                   |

|   | • | the addition of a contract        manufacturer located in China in the third quarter of 2002 (whereas all        product assembly was performed in Europe until the third quarter of 2002), |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

14   Wavecom Annual Report Form 20-F/A    2003

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|   | • | large contribution of sales        from vertical markets, which tend to have higher gross margins than the        PCD business, |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                            |

|   | • | effect of reevaluation of        provisions for third party intellectual property royalties after we entered        into significant new royalty agreements in 2003. Without the €9.1 million        positive impact resulting from the lowering of this provision, the product        gross margin for the year would have been slightly higher than 2002,        at approximately 35%. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Cost of services.* The variability      in gross profit or loss on services reflects the fact that we expense all      development service costs as incurred, while we recognize service revenue      only when the project is complete and the services have been accepted by  the customer.

|   | ***Operating expenses*** |
|--------|--------------------------|
|   |                     |

|                                                     |   |   | **Year ended    Dec. 31, 2002** |   |   | **% of    revenues** |   |   | **Year ended    Dec. 31, 2003** |   |   | **% of    revenues** |   |   | **Percentage    change    2002/2003** |   |
|----------------------------------------------------------|--------|--------|--------------------------------------|--------|--------|----------------------|--------|--------|--------------------------------------|--------|--------|----------------------|--------|--------|---------------------------------------|--------|
|                                                     |   |   |                                      |   |   |                      |   |   |                                      |   |   |                      |   |   |                                       |   |
|                                                     |   |   | **(amounts in €000s)**          |   |
| **Operating expenses**                                   |   |   |                                 |   |   |                 |   |   |                                 |   |   |                 |   |   |                                  |   |
|      Research and development   |   |   | 64,093                               |   |   | 11.6**%**            |   |   | 62,123                               |   |   | 22.5**%**            |   |   | –3.1**%**                        |   |
|      Sales and marketing        |   |   | 26,600                               |   |   | 4.8**%**             |   |   | 27,766                               |   |   | 10,1**%**            |   |   | 4.4**%**                              |   |
|      General and administrative |   |   | 26,163                               |   |   | 4.7**%**             |   |   | 39,141                               |   |   | 14.2**%**            |   |   | 49.6**%**                             |   |
|      Goodwill impairment        |   |   |                                 |   |   |                 |   |   | 4,244                                |   |   | 1.5**%**             |   |   | 100.0**%**                            |   |
|      Stock-based compensation   |   |   | 1,587                                |   |   | N/S                  |   |   | 205                                  |   |   | 0.1**%**             |   |   | –98.4**%**                       |   |
| **Total**                                                |   |   | **118,443**                          |   |   | 21.5**%**            |   |   | **133,479**                          |   |   | **48.4%**            |   |   | **12.7%**                             |   |

*Research and development.* Our      research and development spending reflects the development efforts related      to new Wismo products as we continued to expand our product line and improve      software interfaces and development tools. 2003 spending also reflects      costs related to the development of our own baseband and related components      used in hardware platforms launched in the third quarter of 2003. We held  R&D expenses to 3% below 2002 expenses.

*Sales and marketing.* The      increase of sales and marketing expenses in 2003 reflects an increase in      our presence in the Asia-Pacific and U.S. markets through our local sales      offices, increases in the level of spending at tradeshows and increases      in sales commissions to outside agents following a change in the channel      structure in Asia in late 2002. Following a decision taken mid-2002 to      take steps to increase our visibility in key markets, we launched our first      major print advertising campaign in the fourth quarter of 2002, which continued      throughout the first half of 2003. These additional expenses were partly  compensated by cost reductions in other areas.

*General and administrative.* The      principle reason for the increase in G&A expense in 2003 was the costs      associated with consolidating our Paris-based employees into one building,      moving from three separate sites. In addition to moving costs, higher rental      costs for new facilities and depreciation on new leasehold improvements,      G&A expenses in 2003 included €10.3 million to cover double      rent for the period before the moves and a provision for loss associated      with the former premises. This provision reflects management's estimate      of the costs to be incurred in order to release us from these lease commitments,  including rental costs until such release is obtained.

In addition, in 2003 we recorded      a net increase in the allowance for doubtful accounts of €1.6 million      compared to 2002. The increase in the allowance for doubtful accounts was      related primarily to two European distributors, who were replaced during      2003 as we expanded our distribution network in the region. We are in litigation      with one of these distributors in an attempt to recover a total of €700,000  owed to us.

The overall increase in personnel      and in the volume of business over the course of 2002 led us to reinforce      the finance and support teams. The increase in G&A spending, therefore,      reflects the strengthening of the finance and administrative team at headquarters      and in the Asia-Pacific region, reinforcement of the information systems      group and related capital expenditures. The increase in administrative      and financial costs occurred over the course of 2002 and we incurred the  related salary and employee expenses and other costs for all of 2003.

Wavecom Annual Report Form 20-F/A    2003   15

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*Goodwill impairment.*  In 2000, we purchased a majority interest in a San Diego-based software development company, Arguin, Inc., and in 2001 purchased the tangible and intangible assets of Iconn Wireless, a San Diego-based CDMA-technology company. Based on our management's estimate of probable future cash flows related to these activities, which were used for the required annual impairment test under SFAS 142, we determined that it was necessary to write off the remaining goodwill associated with these acquisitions. 

*Deferred compensation amortization.*  We recorded deferred compensation expense in connection with the issuance of founders' warrants and stock options in September 1998 and February 1999. This deferred expense was amortized on a straight-line basis over the four-year vesting periods of the warrants and options. Deferred compensation expense related to the September 1998 grants was completely amortized at the end of September 2002 and deferred compensation expense related to the February 1999 grants was completely amortized in February 2003. 

***Other income (expense)***

*Interest income, net.*  We recorded net interest income of € 2.8 million for 2003, compared to €3.2 million in 2002. Although interest rates paid on our deposits were lower in 2003 compared to 2002, our average cash balances were roughly the same during the two comparable periods. 

*Foreign exchange gain (loss).*  We had a net foreign exchange loss of €2,065,000 for 2003 compared a net loss of €10,857,000 in 2002. In January 2003, we implemented a hedging program in order to reduce our exposure to movements in the value of the U.S. dollar against the euro. The hedging program involves the use of forward contracts as well as put and call options to hedge estimated future cash flows. 

*Income tax expense (benefit).*  Our €861,000 net tax expense in 2003 (versus a net tax expense of €6,556,000 in 2002), represented principally a deferred tax expense for €10,872,000 and French current taxes for €20,000 which were partly offset by French research and development tax credits for €1,355,000, French tax carry back for €8,558,000 and the income tax benefit of €118,000 of our Asian subsidiary.  

**Fiscal year 2002 compared to fiscal year 2001**

|   | ***Revenues*** |
|--------|----------------|

|                                                |   |   | **Year ended  December 31,2001** |   |   | **% Product   sales** |   |   | **Year ended   December 31, 2002** |   |   | **% Product   sales** |   |   | **Percentage  change 2001/2002** |   |
|-----------------------------------------------------|--------|--------|---------------------------------------|--------|--------|-----------------------|--------|--------|-----------------------------------------|--------|--------|-----------------------|--------|--------|----------------------------------|--------|
|                                                |   |   |                                       |   |   |                       |   |   |                                         |   |   |                       |   |   |                                  |   |
|                                                |   |   | **(amounts in € 000s)**          |   |
| **Product sales**                                   |   |   |                                  |   |   |                  |   |   |                                    |   |   |                  |   |   |                             |   |
|      Wismo                 |   |   | 285,787                               |   |   | 90.0**%**             |   |   | 513,405                                 |   |   | 93.4**%**             |   |   | 79.6**%**                        |   |
|      Modem                 |   |   | 31,784                                |   |   | 10,0**%**             |   |   | 36,138                                  |   |   | 6.6**%**              |   |   | 13.7**%**                        |   |
| **     Total product**     |   |   | **317,571**                           |   |   | **100.0%**            |   |   | **549,543**                             |   |   | **100.0%**            |   |   | **73.0%**                        |   |
| ***Percentage of total revenues***                  |   |   | ***98.4%***                           |   |   |                  |   |   | ***99.7%***                             | ****   |   |                  |   |   |                             |   |
| **Services**                                        |   |   | 5,093                                 |   |   |                  |   |   | 1,546                                   |   |   |                  |   |   | –69.6%                     |   |
| ***Percentage of total revenues***                  |   |   | ***1.6%***                            | ****   |   |                  |   |   | ***0.3%***                              | ****   |   |                  |   |   |                             |   |
| **Total Revenues**                                  |   |   | **322,664**                           |   |   |                  |   |   | **551,089**                             |   |   |                  |   |   | **70.8%**                        |   |
| **Volumes (in 000 of units)**                       |   |   |                                  |   |   |                  |   |   |                                    |   |   |                  |   |   |                             |   |
|      Wismo                 |   |   | 3,739                                 |   |   | 94.1%                 |   |   | 8,496                                   |   |   | 96.4%                 |   |   | 127.2%                           |   |
|      Modem                 |   |   | 234                                   |   |   | 5.9%                  |   |   | 319                                     |   |   | 3.6%                  |   |   | 36.3%                            | 1      |
| **     Total unit volume** |   |   | **3,973**                             |   |   | **100.0%**            |   |   | **8,815**                               |   |   | **100.0%**            |   |   | **121.9%**                       | 2      |

The increase in product revenues in 2002 was due principally to increased sales of Wismo modules for personal communication device applications, but in absolute terms sales in all our target markets (automotive, machine to machine as well as personal communication devices) increased. 

----

| 1 | Typographical error was corrected from the    previously-printed 121.9%       |
|---|-------------------------------------------------------------------------------|
| 2 | Typographical error was corrected    from the previously-printed –38.6% |

16   WavecomAnnual Report Form 20-F/A 2003

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The decrease of revenues from services      reflects the Company's ongoing efforts to ease the process of integrating      the Wismo module into customers' products and therefore reduce the amount      of services needed from Wavecom. We recognize service revenues for development      work once all work is completed.

The sales in term of markets and geographic regions are as follow: 

Sales by markets: 

| **As % of total revenues**                                         |   |   | **2001** |   |   | **2002** |   |
|--------------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|
|                                                                    |   |   |          |   |   |          |   |
| PCD (Personal Communication Devices)                               |   |   | 78%      |   |   | 82%      |   |
| Vertical Markets:                                                  |   |   |     |   |   |     |   |
|      M2M (Machine to Machine)             |   |   | 5%       |   |   | 4%       |   |
|      Distributors (selling mainly to M2M) |   |   | 13%      |   |   | 11%      |   |
|      Automotive                           |   |   | 2%       |   |   | 3%       |   |
| Services                                                           |   |   | 2%       |   |   | N/S      |   |

Sales by geographic regions: 

| **As % of total revenues**     |   |   | **2001** |   |   | **2002** |   |
|--------------------------------|--------|--------|----------|--------|--------|----------|--------|
|                                |   |   |          |   |   |          |   |
| Asia-Pacific                   |   |   | 84%      |   |   | 82%      |   |
| Americas                       |   |   | 1%       |   |   | 5%       |   |
| Europe, Middle East and Africa |   |   | 15%      |   |   | 13%      |   |

|   |                   |
|--------|------------------------|
|   | ***Cost of revenues*** |
|   |                   |

|                                                     |   |   | **Year ended   December 31, 2001** |   |   | **% Product   sales** |   |   | **Year ended   December 31, 2002** |   |   | **% Product   sales** |   |   | **Percentage   change 2001/2002** |   |
|----------------------------------------------------------|--------|--------|-----------------------------------------|--------|--------|-----------------------|--------|--------|-----------------------------------------|--------|--------|-----------------------|--------|--------|-----------------------------------|--------|
|                                                     |   |   |                                         |   |   |                       |   |   |                                         |   |   |                       |   |   |                                   |   |
|                                                     |   |   | **(amounts in € 000s)**            |   |
| **Cost of revenues**                                     |   |   |                                    |   |   |                  |   |   |                                    |   |   |                  |   |   |                              |   |
|      Cost of product            |   |   | 254,658                                 |   |   | 80.2%                 |   |   | 371,919                                 |   |   | 67.7%                 |   |   | 46.0%                             |   |
|      Cost of services           |   |   | 4,718                                   |   |   | 92.6%                 |   |   | 4,709                                   |   |   | 304.6%                |   |   | –0.2%                        |   |
| **     Total cost of revenues** |   |   | **259,376**                             |   |   | **80.4%**             |   |   | **367,628**                             |   |   | **68.3%**             |   |   | **45.2%**                         |   |
| **Gross Profit**                                         |   |   |                                    |   |   |                  |   |   |                                    |   |   |                  |   |   |                              |   |
|      On Products                |   |   | 62,913                                  |   |   | 19.8%                 |   |   | 177,624                                 |   |   | 32.3%                 |   |   | 182.3%                            |   |
|      On Services                |   |   | 375                                     |   |   | 7.4%                  |   |   | –3,163                             |   |   | –204.6%          |   |   | –943.5%                      |   |
| **     Total Gross profit**     |   |   | **63,288**                              |   |   | **19.6%**             |   |   | **174,461**                             |   |   | **31.7%**             |   |   | **175.7%**                        |   |

*Cost of goods sold.*  In 2002, our product gross margin increased in each of the four quarters continuing the trend of sequential quarterly improvements realized throughout 2001. The improvements in gross margin resulted principally from these factors: 

|   | • | We integrated fewer components into our new products. |
|--------|--------|-------------------------------------------------------|

|   | • | We improved oversight of our third-party manufacturers and of the manufacturing process during 2002. In early 2003 we reorganized the manufacturing, customer service and quality assurance teams combining them all under one senior operations manager. As a result of process improvements, we have continued to increase yields and reduce production and test times, which has in turn translated into lower costs and higher capacity on existing production lines. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | During 2002, supplies of the electronic components that we use in our products remained strong and, consequently, market prices for these components declined over the course of the year. In addition to generally favorable market conditions, we benefited from the increased negotiating power accompanying the substantial growth in our production volumes (approximately 8,815,000 units sold in 2002 compared to 4,000,000 units sold in 2001). Lastly, during 2002 we reinforced our purchasing team and began negotiating more aggressively with both our third-party manufacturers and the component suppliers. We believe this had a significant favorable impact on our ability to reduce our cost of goods sold. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Cost of services.*  The variability in gross profit or loss on services reflects the fact that we expense all development service costs as incurred, while we recognize service revenue only when the project is complete and the services have been accepted by the customer. 

Wavecom Annual Report Form 20-F/A 2003   17

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|   | ***Operating expenses*** |
|--------|--------------------------|
|   |                     |

|                                                     |   |   | **Year ended  Dec. 31, 2001** |   |   | **% of  revenues** |   |   | **Year ended  Dec. 31, 2002** |   |   | **% of  revenues** |   |   | **Percentage  change2001/2002** |   |
|----------------------------------------------------------|--------|--------|-----------------------------------------|--------|--------|--------------------|--------|--------|-----------------------------------------|--------|--------|--------------------|--------|--------|---------------------------------|--------|
|                                                     |   |   |                                         |   |   |                    |   |   |                                         |   |   |                    |   |   |                                 |   |
|                                                     |   |   | **(amounts in € 000s)**            |   |
| **Operating expenses**                                   |   |   |                                    |   |   |               |   |   |                                    |   |   |               |   |   |                            |   |
|      Research and development   |   |   | 32,634                                  |   |   | 10.1%              |   |   | 64,093                                  |   |   | 11.6%              |   |   | 96.4%                           |   |
|      Sales and marketing        |   |   | 12,416                                  |   |   | 3.8%               |   |   | 26,600                                  |   |   | 4.8%               |   |   | 114.2%                          |   |
|      General and administrative |   |   | 13,297                                  |   |   | 4.1%               |   |   | 26,163                                  |   |   | 4.7%               |   |   | 96.8%                           |   |
|      Goodwill impairment        |   |   | 278                                     |   |   | 0.1%               |   |   |                                    |   |   |               |   |   |                            |   |
|      Stock-based compensation   |   |   | 1,711                                   |   |   |               |   |   | 1,587                                   |   |   | 0.3%               |   |   |                            |   |
| **Total**                                                |   |   | **60,336**                              |   |   | **18.7%**          |   |   | **118,443**                             |   |   | **21.5%**          |   |   | **96.3%**                       |   |

*Research and development.*  The increase in our research and development spending reflects, in particular, the development efforts related to new Wismo modules as we expanded our product line with new modules based on CDMA as well as GSM/GPRS. Research and development expenses also reflect the significant resources being used to adapt our existing products for new digital wireless standards, including GPRS and W-CDMA. 

*Sales and marketing.*  The increase of sales and marketing expenses in 2002 reflects an increase in headcount from 47 people in 2001 to 79 by the end of 2002, as well as increased promotional and advertising spending, particularly in the fourth quarter of 2002. As part of an effort to increase the visibility of Wavecom to prospective customers, we sponsored a golf tournament in China and ran print advertising in major publications in our main target markets for the first time We also increased the amount of sales commissions to sales personnel and to sales agents, reflecting the increased level of revenues. 

*General and administrative.*  We increased the number of personnel in our general and administrative services (including finance, legal, corporate communications, human resources, and information systems departments) from 89 at December 31, 2001 to 130 at December 31, 2002. Rent expense increased following the signing of a new office lease in Issy-les-Moulineaux in July 2002, with the objective of regrouping in 2003 personnel previously spread over three locations. Insurance and information technology expenses also increased significantly. These increases reflect the growth of our business and the development of our subsidiaries in Asia and in the United States. In addition, legal and patentattorney fees increased as we continued to negotiate licensing agreements with an increasing number of GSM, GPRS, CDMA and other patent and technology holders, as well as increasing the number of registrations of our own patents. 

|   | ***Other income (expense)*** |
|--------|------------------------------|

*Interest income, net.*  We recorded net interest income of € 3,159,000 in 2002, compared to €3,827,000 in 2001. The decrease in net interest income results from the decline in interest rates over the course of the year, partially offset by higher average cash balances invested. 

*Foreign exchange gain (loss).*  We had a net foreign exchange loss of €10,857,000 in 2002 compared to a net gain of €142,000 in 2001, due primarily to changes in the value of the U.S. dollar (the primary currency other than the euro in which we invoice sales and make purchases) compared to the euro. Of the total 2002 loss, €8,415,000 was recognized during the second quarter of the year when the U.S. dollar declined significantly against the euro at the same time as we began generating significant amounts of U.S. dollar-denominated cash. Foreign exchange losses were incurred on cash balances and accounts receivable denominated in dollars, offset partly by gains on accounts payable in dollars.

*Income tax expense (benefit).*  With the increased profitability of the group in 2002, we used all tax loss carryforwards remaining in France during 2002 and recorded a net tax expense of €6,556,000 for the year. The net expense reflects tax expense recognized in all jurisdictions, except the United States, net of French research tax credits totaling €449,000 in 2002. Our €2,299,000 net tax benefit in 2001 represents principally French research tax credits, offset slightly by tax expense in certain jurisdictions. Research tax credits are  received in cash in the fourth year after the period in which they are recorded, if they are not used to offset income taxes payable in France prior to thattime. 

18   Wavecom Annual Report Form 20-F/A 2003

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**Selected quarterly operating results**

The following table sets forth a summary of Wavecom's unaudited quarterly operating results for each of the eight fiscal quarters in the period ended December 31, 2003. We have derived this information from our unaudited interim consolidated financial statements which have been prepared on a basis consistent with our audited consolidated financial statements. The results of operations for any quarter are not necessarily indicative of results for any future period. 

|                                                                                                                                     |   | **Three months ended** |                                                              |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|-------------------------------------------------------------------|
|                                                                                                                                     |   |                        |                                                              |
|                                                                                                                                     |   | **March 31,2002** |                                                              | **June 30,2002** |   | **Sept. 30,2002** |   | **Dec. 31,2002** |   | **March 31,2003** |   | **June 30,2003   Restated (1)** |   | **Sept. 302003** |   | **Dec. 31,2003** |   |
|                                                                                                                                     |   |                        |                                                              |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
|                                                                                                                                     |   |                   | **(unaudited)(in thousands, except share and per share amounts)** |   |
| Revenues:                                                                                                                                |   |                   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Product sales                                                                                              |   | €                 | 108,357                                                           |   | € | 135,752 |   | € | 170,485 |   | € | 134,949 |   | € | 87,180 |   | € | 69,070 |   | € | 56,946 |   | € | 58,577 |   |
|      Technology development             and other    services |   |                   | 262                                                               |   |   | 264 |   |   | 534 |   |   | 485 |   |   | 806 |   |   | 869 |   |   | 476 |   |   | 1,704 |   |
|                                                                                                                                     |   |                        |                                                              |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
| Total revenues                                                                                                                           |   |                   | 108,619                                                           |   |   | 136,016 |   |   | 171,019 |   |   | 135,434 |   |   | 87,986 |   |   | 69,939 |   |   | 57,422 |   |   | 60,281 |   |
| Cost of revenues:                                                                                                                        |   |                   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Cost of goods sold                                                                                         |   |                   | 79,457                                                            |   |   | 96,112 |   |   | 115,918 |   |   | 80,431 |   |   | 57,218 |   |   | 44,016 |   |   | 38,496 |   |   | 28,735 |   |
|      Cost of services                                                                                           |   |                   | 1,130                                                             |   |   | 712 |   |   | 1,431 |   |   | 1,436 |   |   | 1,355 |   |   | 548 |   |   | 716 |   |   | 2,084 |   |
|                                                                                                                                     |   |                        |                                                              |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
|           Total    cost of revenues                                                    |   |                   | 80,587                                                            |   |   | 96,824 |   |   | 117,349 |   |   | 81,867 |   |   | 58,573 |   |   | 44,564 |   |   | 39,212 |   |   | 30,819 |   |
|                                                                                                                                     |   |                        |                                                              |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
| Gross profit                                                                                                                             |   |                   | 28,032                                                            |   |   | 39,192 |   |   | 53,670 |   |   | 53,567 |   |   | 29,413 |   |   | 25,375 |   |   | 18,210 |   |   | 29,462 |   |
| Operating expenses:                                                                                                                      |   |                   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Research and development                                                                                   |   |                   | 12,672                                                            |   |   | 14,925 |   |   | 14,870 |   |   | 21,626 |   |   | 16,710 |   |   | 16,490 |   |   | 15,569 |   |   | 13,354 |   |
|      Sales and marketing                                                                                        |   |                   | 3,906                                                             |   |   | 5,166 |   |   | 5,144 |   |   | 12,384 |   |   | 9,252 |   |   | 8,668 |   |   | 4,704 |   |   | 5,142 |   |
|      General and administrative                                                                                 |   |                   | 4,735                                                             |   |   | 5,984 |   |   | 6,632 |   |   | 8,811 |   |   | 8,650 |   |   | 9,599 |   |   | 10,694 |   |   | 10,197 |   |
|      Amortization and             impairment of goodwill      |   |                   | —                                                            |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   | — |   |   | 4,244 |   |
|      Deferred compensation             amortization           |   |                   | 428                                                               |   |   | 428 |   |   | 428 |   |   | 304 |   |   | 205 |   |   | — |   |   | — |   |   | — |   |
|                                                                                                                                     |   |                        |                                                              |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
|           Total    operating expenses                                                  |   |                   | 21,741                                                            |   |   | 26,503 |   |   | 27,074 |   |   | 43,125 |   |   | 34,817 |   |   | 34,757 |   |   | 30,967 |   |   | 32,937 |   |
|                                                                                                                                     |   |                        |                                                              |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
| Operating income (loss)                                                                                                                  |   |                   | 6,291                                                             |   |   | 12,689 |   |   | 26,596 |   |   | 10,442 |   |   | (5,404 | ) |   | (9,382 | ) |   | (12,757 | ) |   | (3,475 | ) |
| Interest and other financial     income    (expense), net                                                       |   |                   | 814                                                               |   |   | (7,726 | ) |   | 1,768 |   |   | (2,552 | ) |   | (69 | ) |   | 449 |   |   | 1,945 |   |   | (1,622 | ) |
|                                                                                                                                     |   |                        |                                                              |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
| Income (loss) before minority       interests    and income taxes                                               |   |                   | 7,105                                                             |   |   | 4,963 |   |   | 28,364 |   |   | 7,890 |   |   | (5,473 | ) |   | (8,933 | ) |   | (10,812 | ) |   | (5,097 | ) |
| Minority interests                                                                                                                       |   |                   | 7                                                                 |   |   | 46 |   |   | 242 |   |   | 28 |   |   | (289 | ) |   | 232 |   |   | 93 |   |   | — |   |
|                                                                                                                                     |   |                        |                                                              |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
| Income (loss) before income        taxes                                                                        |   |                   | 7,112                                                             |   |   | 5,009 |   |   | 28,606 |   |   | 7,918 |   |   | (5,762 | ) |   | (8,701 | ) |   | (10,719 | ) |   | (5,097 | ) |
| Income tax expense (benefit)                                                                                                             |   |                   | (690                                                              | ) |   | (741 | ) |   | 11,310 |   |   | 3,323 |   |   | (1,671 | ) |   | 3,093 |   |   | (245 | ) |   | (315 | ) |
|                                                                                                                                     |   |                        |                                                              |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
| Net income (loss)                                                                                                                        |   | €                 | 7,802                                                             |   | € | 5,750 |   | € | 17,296 |   | € | 11,241 |   | € | (4,091 | ) | € | (11,794 | ) | € | (10,474 | ) | € | (4,782 | ) |
|                                                                                                                                     |   |                        |                                                              |  |   |  |   |  |   |  |   |  |   |  |   |  |   |
| Basic net income (loss) per      share                                                                          |   | €                 | 0.53                                                              |   | € | 0.39 |   | € | 1.16 |   | € | 0.75 |   | € | (0.27 | ) | € | (0.79 | ) | € | (0.69 | ) | € | (0.31 | ) |
| Diluted net income (loss) per     share                                                                         |   | €                 | 0.51                                                              |   | € | 0.37 |   | € | 1.11 |   | € | 0.73 |   | € | (0.27 | ) | € | (0.79 | ) | € | (0.69 | ) | € | (0.31 | ) |
| Shares used in computing basic        net    income (loss) per share                                            |   |                   | 14,841,415                                                        |   |   | 14,903,600 |   |   | 14,971,841 |   |   | 15,052,768 |   |   | 15,122,646 |   |   | 15,014,022 |   |   | 15,075,139 |   |   | 15,183,387 |   |
| Shares used in computing        diluted    net income (loss)          per share        |   |                   | 15,444,491                                                        |   |   | 15,493,759 |   |   | 15,530,516 |   |   | 15,413,783 |   |   | 15,122,646 |   |   | 15,014,022 |   |   | 15,075,139 |   |   | 15,183,387 |   |

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1)    | Income tax expense (benefit),        Net income (loss), Basic net income (loss) per share and Diluted net        income (loss) per share for the three months ended June 30, 2003, have        been restated to correct an error in the accounting related to the valuation        allowance for our deferred tax assets for the three months ended June        30, 2003. See Note 16 to the financial statements included elsewhere        in this Annual Report. |

Wavecom Annual Report Form 20-F/A 2003   19

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We believe that period-to-period comparisons of our operating results are not necessarily meaningful. Our quarterly and annual operating results have fluctuated in the past and are likely to fluctuate significantly in the future. You should not rely on them to predict future performance. Our revenue may fluctuate due to the amount of new customer orders and the timing in beginning production and delivery of these new orders. The amount and timing of our operating expenses may fluctuate significantly in the future as a result of the timing of these orders and our development of new products and technologies. For a discussion of factors which may affect our quarterly and annual operating results, see "Item3–Key Information–Risk Factors–Our quarterly revenues fluctuate significantly and may affect the price of our shares and ADSs."

***Recent  events***

In October 2003 we announced a plan to consolidate all production with one contract manufacturer located in China as well as to reorganize our customer care unit. Under the restructuring plan, we will terminate a number of employees resulting in an accounting impact which will be reflected in the 2004 financial statements because benefit arrangements were not defined and announced to employees until January 2004. 

On January 23, 2004, we announced an additional plan to reduce headcount linked to the implementation of a new organizational structure based on our two primary sales markets and on wireless silicon development. Once the plans are fully implemented, our worldwide headcount is expected to be reduced by about 300 positions. The restructuring will affect employees primarily in France and in the United States. This plan is expected to cost approximately  €10 to €15 million related primarily to headcount reduction and associated charges, including severance and outplacement packages. 

On February 20, 2004, we signed a memorandum of understanding with the minority shareholders of Arguin Communications, Inc. for the purchase of their remaining minority interest in Arguin for a total of $2,135,625. As part of this agreement, certain of the former Arguin shareholders will enter into non-compete agreements for a period of two years. 

On March 23, 2004, our board of directors granted 38,000 founders' warrants to employees of Wavecom S.A. and 3,000 stock options to an employee of Wavecom Asia Pacific, Ltd. The exercise price is €9.62. 

***Liquidity and capital resources***

We had negative cash flow from operating activities of €5,875,0001 for the year ended December 31, 2003 compared to a positive cash flow from operating activities of €41,867,000 in 2002. 

We had working capital (defined as current assets less current liabilities) of €80,339,000 at December 31, 2003, down from € 105,418,000 at December 31, 2002. 

At December 31, 2003, our capital lease obligations (including the current portion) amounted to €1,280,000, compared to capital lease obligations of €501,000 at the end of 2002. 

We had €110,705,000 in cash, cash equivalents and short-term investments at December 31, 2003 compared to €134,528,000 at December 31, 2002. The decrease reflects primarily the impact of the operating loss and capital expenditures during the year. 

At December 31, 2003, we had bank guarantees for €15,978,000 to secure lease payments under office leases signed in December 2000 and July 2002. These lines were secured by pledged certificates recorded as long-term assets, rather than as cash or short-term investments, because the guarantee has a term greater than one year. 

Based on our current plans, and despite the cost of the restructuring plan in 2004, we believe that our available capital resources will be adequate to satisfy our cash requirements at least for 12 months from the date of this report. If our plans change, or if we do not achieve profits or if our profits are significantly lower than anticipated, we may need additional funding to remain in business. 

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| 1 | Typographical error was corrected    from the previously-printed €5,735,000 |
|---|----------------------------------------------------------------------------------|

20   Wavecom AnnualReport Form 20-F/A 2003

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Our contractual obligations consist      principally of obligations under capital leases, operating leases, and  other short-term obligations.

|                               |   |  **Payments          due by period (amounts in millions)** |   |
|------------------------------------|--------|-----------------------------------------------------------------|--------|
|                               |   |                                                                 |        |  |  |  |  |  |  |  |  |  |  |  |  |   |
| **Contractual obligations**        |   | **Total**                                                       |   | **Less than      1 year** |   | **1-3 years** |   | **4-5 years** |   | **After      5 years** |   |
|                               |   |                                                                 |        |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Capital lease obligations          |   | €                                                          | 1.3    |   | € | 0.9 |   | € | 0.4 |   |   |   |   |   |   |   |
| Operating leases                   |   |                                                            | 66.0   |   |   | 11.0 |   |   | 20.4 |   | € | 17.6 |   | € | 17.0 |   |
| Others                             |   |                                                            | 33.7   |   |   | 33.7 |   |   |   |   |   |   |   |   |   |   |
|                               |   |                                                                 |        |   |  |  |   |  |  |   |  |  |   |  |  |   |
| Total contractual cash obligations |   | €                                                          | 101.0  |   | € | 45.6 |   | € | 20.8 |   | € | 17.6 |   | € | 17.0 |   |
|                               |   |                                                                 |        |   |  |  |   |  |  |   |  |  |   |  |  |   |

Our contractual obligations under      operating leasing as of December 31, 2003 include approximately €13 million      related to leases, expiring in March 2005, June 2006 and May 2008,      for office space which we vacated in mid-2003 following the consolidation      of all personnel in Issy-les-Moulineaux in one building. A €5.8 million  provision was recorded at December 31, 2003.

At December 31, 2003, we had      commitments outstanding to purchase approximately €1.2 million      in fixed assets, which are expected to be placed in service during the      next two quarters. Our future capital requirements, the timing and amount      of expenditures, and the adequacy of funds available to us will depend      on our success in developing and selling new and existing products, as      well as technological and market developments in the wireless communications  industry and on other factors, such as headcount growth.

At December 31, 2003, we had      purchase commitments with our third-party manufacturers for future deliveries      of products, principally during the first half of 2004. These purchase  commitments totaled approximately €32.5 million.

|   | ***Interest rate risk*** |
|--------|--------------------------|

At December 31, 2003, we had €101,441,000      in cash and cash equivalents invested in short-term money-market accounts      bearing variable rates of interest. We had an additional €16 million      of pledged securities invested in short-term money market accounts. We  had no variable rate debt at December 31, 2003.

|   | ***Impact of currency fluctuations*** |
|--------|---------------------------------------|

We publish our consolidated financial      statements in euro and the functional currency of Wavecom S.A. is the euro.      In 2003, we recorded 72% of our total revenues in U.S. dollars, with virtually      all the rest in euro. We purchase many of our components for U.S. dollars      and the operating expenses of our U.S. subsidiaries are in U.S. dollars.      The operating expenses of our Hong Kong subsidiary are primarily in Hong      Kong dollars, which are closely tied to the U.S. dollar. Most of our other      operating expenses are in euros. Dollar purchases and expenses represented      approximately 55% of our cost of revenues and operating expenses in 2003.      A strengthening of the euro against the U.S. dollar and other currencies      in which we receive revenues could reduce our reported revenues and our      reported operating and net results. We incurred a net foreign exchange      loss of €2,065,000 in 2003, a net foreign exchange loss of €10,857,000  in 2002 and a net foreign exchange gain of € 142,000 in 2001.

If the euro had appreciated by      10% compared to the U.S. Dollar during the year ended December 31,      2003, our revenues would have been €17.9 million lower and our      expenses would have been €15.1 million lower, resulting in an      operating loss of €2.8 million greater than the published result.      Our net foreign exchange position is described in Note 5 to our consolidated  financial statements.

In January 2003, we began      to use a combination of options and forward exchange contracts in order      to minimize the risk to our estimated net dollar cash flows over the coming      months. Because these financial instruments do not always hedge specific      transactions, they may be accounted for as speculative transactions, with      the fair market value of the instruments being recorded on our balance      sheet and their change in market value recognized in our profit and loss  accounts at the end of each accounting period.

22   Wavecom Annual Report Form 20-F/A    2003

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**PART III**

**Item 18: Financial      Statements**

**WAVECOM S.A.**

**INDEX TO      CONSOLIDATED FINANCIAL STATEMENTS**

|                                                                                                                             |   | **Page** |
|----------------------------------------------------------------------------------------------------------------------------------|--------|----------|
| Report of Independent          Registered Public Accounting Firm                                                                 |   | F-2      |
| Consolidated          Statements of Operations for the years ended December 31, 2001, 2002          and 2003                     |   | F-3      |
| Consolidated          Balance Sheets at December 31, 2001, 2002 and 2003                                                         |   | F-4      |
| Consolidated          Statement of Changes in Shareholders' Equity for the years ended December          31, 2001, 2002 and 2003 |   | F-5      |
| Consolidated          Statements of Cash Flows for the years ended December 31, 2001, 2002          and 2003                     |   | F-6      |
| Notes to Consolidated          Financial Statements                                                                              |   | F-7      |

Wavecom Annual Report Form 20-F/A    2003   F-1

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**REPORT OF INDEPENDENT REGISTEREDPUBLIC ACCOUNTING FIRM**

The Board of Directors and ShareholdersWavecom S.A.

We have audited the accompanying      consolidated balance sheets of Wavecom S.A. as of December 31, 2001,      2002 and 2003 (as restated), and the related consolidated statements of      operations, changes in shareholders' equity and cash flows for each of      the three years in the period ended December 31, 2003. These consolidated      financial statements are the responsibility of Wavecom's management. Our      responsibility is to express an opinion on these consolidated financial  statements based on our audits.

We conducted our audits in accordance      with the standards of the Public Company Accounting Oversight Board (United      States). Those standards require that we plan and perform the audit to      obtain reasonable assurance about whether the financial statements are      free of material misstatement. An audit includes consideration of internal      control over financial reporting as a basis for designing audit procedures      that are appropriate in the circumstances, but not for the purpose of expressing      an opinion on the effectiveness of the Company’s internal control      over financial reporting. Accordingly, we express no such opinion. An audit      also includes examining, on a test basis, evidence supporting the amounts      and disclosures in the financial statements, assessing the accounting principles      used and significant estimates made by management, and evaluating the overall      financial statement presentation. We believe that our audits provide a      reasonable basis for our opinion.

In our opinion, the consolidated      financial statements referred to above present fairly, in all material      respects, the financial position of Wavecom, S.A. at December 31,      2001, 2002 and 2003, and the consolidated results of its operations and      its cash flows for each of the three years in the period ended December 31,      2003, in conformity with accounting principles generally accepted in the  United States.

As described in Note 16, the 2003      financial statements have been restated to correct an error in the application  of U.S. generally accepted accounting principles.

 

ERNST & YOUNG Audit

Represented byJean-YvesJégourel

Paris-La Défense, FranceFebruary 7, 2004except for Note 10 and Note 16, asto which the date is February 10, 2005

F-2   Wavecom Annual    Report Form 20-F/A 2003

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**WAVECOM S.A.  CONSOLIDATED STATEMENTS OF OPERATIONS  (in thousands, except share and per share data)**

|                                                                                                                             |   |     | **Years ended          December 31,** |     |
|----------------------------------------------------------------------------------------------------------------------------------|--------|----------|---------------------------------------|----------|
|                                                                                                                             |   |          |                                       |          |  |  |  |  |  |   |
|                                                                                                                             |   | **2001** |                                  | **2002** |   | **2003 restated (1)** |   |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
| Revenues:                                                                                                                        |   |     |                                  |     |   |   |   |   |   |   |
|      Product sales                                                             |   | €   | 317,571                               |     | € | 549,543 |   | € | 271,773 |   |
|      Technology development and other        services                          |   |     | 5,093                                 |     |   | 1,546 |   |   | 3,855 |   |
|                                                                                                                             |   |     |                                  |     |   |   |   |   |   |   |
|      Total revenues                                                            |   |     | 322,664                               |     |   | 551,089 |   |   | 275,628 |   |
| Cost of revenues:                                                                                                                |   |     |                                  |     |   |   |   |   |   |   |
|      Product sales:                                                                                     |   |     |                                  |     |   |   |   |   |   |   |
|           Cost        of goods sold                   |   |     | 254,658                               |     |   | 371,919 |   |   | 177,541 |   |
|           Adjustment        of royalty provision      |   |     | —                                |     |   | — |   |   | (9,076 | ) |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
|      Total cost of product sales                                               |   |     | 254,658                               |     |   | 371,919 |   |   | 168,465 |   |
|      Cost of services                                                          |   |     | 4,718                                 |     |   | 4,709 |   |   | 4,704 |   |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
|      Total cost of revenues                                                    |   |     | 259,376                               |     |   | 376,628 |   |   | 173,169 |   |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
| Gross profit                                                                                                                     |   |     | 63,288                                |     |   | 174,461 |   |   | 102,459 |   |
| Operating expenses:                                                                                                              |   |     |                                  |     |   |   |   |   |   |   |
|      Research and development                                                  |   |     | 32,634                                |     |   | 64,093 |   |   | 62,123 |   |
|      Sales and marketing                                                       |   |     | 12,416                                |     |   | 26,600 |   |   | 27,766 |   |
|      General and administrative                                                |   |     | 13,297                                |     |   | 26,163 |   |   | 39,141 |   |
|      Deferred compensation amortization                                        |   |     | 1,711                                 |     |   | 1,587 |   |   | 205 |   |
|      Amortization and impairment        of goodwill                            |   |     | 278                                   |     |   | — |   |   | 4,244 |   |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
|      Total operating expenses                                                  |   |     | 60,336                                |     |   | 118,443 |   |   | 133,479 |   |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
| Operating income (loss)                                                                                                          |   |     | 2,952                                 |     |   | 56,018 |   |   | (31,020 | ) |
| Interest expense                                                                                                                 |   |     | (523                                  | )        |   | (527 | ) |   | (581 | ) |
| Interest income                                                                                                                  |   |     | 4,350                                 |     |   | 3,686 |   |   | 3,348 |   |
| Foreign exchange gain (loss)                                                                                                     |   |     | 142                                   |     |   | (10,857 | ) |   | (2,065 | ) |
| Provision for loss on long-term        investments                                                                               |   |     | (716                                  | )        |   | — |   |   | — |   |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
| Income (loss) before minority        interest and income taxes                                                                   |   |     | 6,205                                 |     |   | 48,320 |   |   | (30,318 | ) |
| Minority interest.                                                                                                               |   |     | (804                                  | )        |   | (323 | ) |   | (38 | ) |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
| Income (loss) before income        taxes                                                                                         |   |     | 7,009                                 |     |   | 48,643 |   |   | (30,280 | ) |
| Income tax expense (benefit)                                                                                                     |   |     | (2,299                                | )        |   | 6,556 |   |   | 861) |   |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
| Net income (loss)                                                                                                                |   | €   | 9,308                                 |     | € | 42,087 |   | € | (31,141 | ) |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
| Basic net income (loss) per        share                                                                                         |   | €   | 0.63                                  |     | € | 2.82 |   | € | (2.06 | ) |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
| Diluted net income (loss) per        share                                                                                       |   | €   | 0.61                                  |     | € | 2.74 |   | € | (2.06 | ) |
|                                                                                                                             |   |          |                                       |     |  |  |   |  |  |   |
| Number of shares used for computing:                                                                                             |   |     |                                  |     |   |   |   |   |   |   |
|      –basic net income (loss)        per share                            |   |     | 14,726,647                            |     |   | 14,943,048 |   |   | 15,098,795 |   |
|      –diluted net income (loss)        per share                          |   |     | 15,359,226                            |     |   | 15,348,985 |   |   | 15,098,795 |   |
|                                                                                                                             |   |     |                                  |     |   |   |   |   |   |   |

| (1) | Income tax expense (benefit),        Net income (loss), Basic net income (loss) per share and Diluted net        income (loss) per share for the year ended December 31, 2003, have been        restated to correct an error in the accounting related to the valuation        allowance for deferred tax assets for the year ended December 31, 2003.        See Note 16 to the consolidated financial statements. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

See notes to financial statements

Wavecom Annual Report Form 20-F/A    2003   F-3

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**WAVECOM S.A.  CONSOLIDATED BALANCE SHEETSIn Thousands**

|                                                                                                                                                                                                                                           |   |  **December 31,** |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                                                                                                                                                           |   |  **2001**         |    |  **2002** |   |  **2003 restated    (1)** |   |
|                                                                                                                                                                                                                                           |   |                        |         |   |  |  |   |  |  |   |
| **ASSETS**                                                                                                                                                                                                                                     |   |                   |    |   |   |   |   |   |   |   |
| Current assets:                                                                                                                                                                                                                                |   |                   |    |   |   |   |   |   |   |   |
|      Cash and cash equivalents                                                                                                                                                                                        |   | €                 | 128,972 |   | € | 119,416 |   | € | 110,705 |   |
|      Short-term investments                                                                                                                                                                                           |   |                   | 3,008   |   |   | 15,112 |   |   | — |   |
| Accounts          receivable (less allowance for doubtful accounts of €328, €243    and €1,866 at December 31, 2001, 2002 and 2003, respectively)                                                                               |   |                   | 46,219  |   |   | 85,921 |   |   | 44,622 |   |
|      Inventory, net                                                                                                                                                                                                   |   |                   | 13,858  |   |   | 30,205 |   |   | 33,809 |   |
|      Value added tax recoverable                                                                                                                                                                                      |   |                   | 22,251  |   |   | 6,430 |   |   | 2,235 |   |
|      Prepaid expenses and other current        assets                                                                                                                                                                 |   |                   | 12,720  |   |   | 9,335 |   |   | 11,442 |   |
|      Recoverable taxes                                                                                                                                                                                                |   |                   | —  |   |   | — |   |   | 7,670 |   |
|      Deferred tax assets, current        portion                                                                                                                                                                      |   |                   | —  |   |   | 3,889 |   |   | 1,059 |   |
|                                                                                                                                                                                                                                           |   |                        |         |   |  |  |   |  |  |   |
|           Total        current assets                                                                                                                                                        |   |                   | 227,028 |   |   | 270,308 |   |   | 211,542 |   |
| Property and equipment, net                                                                                                                                                                                                                    |   |                   | 15,666  |   |   | 29,624 |   |   | 27,862 |   |
| Goodwill, net of accumulated        amortization of €326 at December 31, 2001 and 2002                                                                                                                                                    |   |                   | 5,716   |   |   | 4,807 |   |   | — |   |
| Long-term investments                                                                                                                                                                                                                          |   |                   | 3,476   |   |   | 14,152 |   |   | 16,502 |   |
| Other assets                                                                                                                                                                                                                                   |   |                   | 8,061   |   |   | 5,102 |   |   | 9,409 |   |
| Recoverable tax loss carryback        and research tax credit                                                                                                                                                                                  |   |                   | —  |   |   | — |   |   | 9,913 |   |
| Deferred tax assets                                                                                                                                                                                                                            |   |                   | —  |   |   | 8,041 |   |   | — |   |
|                                                                                                                                                                                                                                           |   |                        |         |   |  |  |   |  |  |   |
|           Total        assets                                                                                                                                                                |   | €                 | 259,947 |   | € | 332,034 |   | € | 275,228 |   |
|                                                                                                                                                                                                                                           |   |                        |         |   |  |  |   |  |  |   |
| **LIABILITIES AND SHAREHOLDERS'          EQUITY**                                                                                                                                                                                              |   |                   |    |   |   |   |   |   |   |   |
| Current liabilities:                                                                                                                                                                                                                           |   |                   |    |   |   |   |   |   |   |   |
|      Accounts payable                                                                                                                                                                                                 |   | €                 | 111,926 |   | € | 99,937 |   | € | 85,995 |   |
|      Accrued compensation                                                                                                                                                                                             |   |                   | 5,755   |   |   | 10,488 |   |   | 7,208 |   |
|      Other accrued expenses                                                                                                                                                                                           |   |                   | 15,525  |   |   | 36,367 |   |   | 35,655 |   |
|      Current portion of loans                                                                                                                                                                                         |   |                   | 488     |   |   | — |   |   | — |   |
|      Current portion of capitalized        lease obligations                                                                                                                                                          |   |                   | 201     |   |   | 214 |   |   | 855 |   |
|      Deferred revenue and advances        received from customers                                                                                                                                                     |   |                   | 2,648   |   |   | 4,100 |   |   | 1,420 |   |
|      Income tax payable                                                                                                                                                                                               |   |                   | —  |   |   | 13,605 |   |   | — |   |
|      Other liabilities                                                                                                                                                                                                |   |                   | 521     |   |   | 179 |   |   | 70 |   |
|                                                                                                                                                                                                                                           |   |                        |         |   |  |  |   |  |  |   |
|           Total        current liabilities                                                                                                                                                   |   |                   | 137,064 |   |   | 164,890 |   |   | 131,203 |   |
| Long-term portion of capitalized        lease obligations                                                                                                                                                                                      |   |                   | 228     |   |   | 287 |   |   | 425 |   |
| Other long-term liabilities                                                                                                                                                                                                                    |   |                   | 410     |   |   | — |   |   | 6,267 |   |
|                                                                                                                                                                                                                                           |   |                        |         |   |  |  |   |  |  |   |
|           Total        long-term liabilities                                                                                                                                                 |   |                   | 638     |   |   | 287 |   |   | 6,692 |   |
|                                                                                                                                                                                                                                           |   |                        |         |   |  |  |   |  |  |   |
| Minority interest                                                                                                                                                                                                                              |   |                   | 361     |   |   | 38 |   |   | — |   |
| Commitments and contingencies                                                                                                                                                                                                                  |   |                   |    |   |   |   |   |   |   |   |
| Shareholders' equity:                                                                                                                                                                                                                          |   |                   |    |   |   |   |   |   |   |   |
| Shares, €1          nominal value; 14,810,614 shares issued and outstanding at December 31,          2001; 15,107,890 shares issued and outstanding at December 31,    2002; 15,342,789 shares issued at December 31, 2003 |   |                   | 14,811  |   |   | 15,108 |   |   | 15,343 |   |
| Additional paid in capital                                                                                                                                                                                                                     |   |                   | 135,013 |   |   | 135,954 |   |   | 136,460 |   |
| Treasury stock (156,345 shares        at December 31, 2003)                                                                                                                                                                                    |   |                   | —  |   |   | — |   |   | (1,312 | ) |
| Deferred compensation                                                                                                                                                                                                                          |   |                   | (2,991  | ) |   | (975 | ) |   | (323 | ) |
| Retained earnings (deficit)                                                                                                                                                                                                                    |   |                   | (25,671 | ) |   | 16,416 |   |   | (14,587 | ) |
| Accumulated other comprehensive        income                                                                                                                                                                                                  |   |                   | 722     |   |   | 316 |   |   | 1,752 |   |
|                                                                                                                                                                                                                                           |   |                        |         |   |  |  |   |  |  |   |
|           Total        shareholders' equity                                                                                                                                                  |   |                   | 121,884 |   |   | 166,819 |   |   | 137,333 |   |
|                                                                                                                                                                                                                                           |   |                        |         |   |  |  |   |  |  |   |
|           Total        liabilities and shareholders' equity                                                                                                                                  |   | €                 | 259,947 |   | € | 332,034 |   | € | 275,228 |   |
|                                                                                                                                                                                                                                           |   |                        |         |   |  |  |   |  |  |   |
|                                                                                                                                                                                                                                           |   |                   |    |   |   |   |   |   |   |   |

| (1) | Total current assets, Total assets and        Total shareholders’ equity at December 31, 2003, have been restated        to correct an error in the accounting related to the valuation allowance        for deferred tax assets for the year ended December 31, 2003. See Note    16 to the consolidated financial statements. See notes to financial statements |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

F-4   Wavecom Annual    Report Form 20-F/A 2003

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**WAVECOM S.ACONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY(in thousands of euro, except share data)**

|                                                                                                                                         |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       | **Accumulated****Other****Comprehensive** |    |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|------------|------------------------------------|--------------|-------------|--------------|-----------|---------|------------------|--------|--------------------------|--------|-------------------|----------------------------|------------|-------------------------------------------|---------|--------|--------|--------|
|                                                                                                                                         |   | **Shares** |       | **Additional****paid          in** |         |        |         |      |    |             |   | **Retained****Earnings** |   |              | **Total****Shareholders'** |       |
|                                                                                                                                         |   |            |       |                               | **Treasury** |        | **Deferred** |      |    |             |   |
|                                                                                                                                         |   | **Shares** |       | **Amount**                         |         | **capital** |         | **Stock** |    | **Compensation** |   | **(Deficit)**            |   | **Income (loss)** |                       | **Equity** |                                      |
|                                                                                                                                         |   |            |       |                                    |         |             |         |           |    |                  |   |                          |   |                   |                       |            |                                      |
| Balance at December 31, 2000                                                                                                                 |   |       | 14,682,281 |                               | €       | 14,682      |         | €    | 132,993 |             | € | —                   |   | €            | (3,606                     | )          | €                                    | (34,979 | )      | € | (1,080 | ) | € | 108,010 |   |
| Forfeiture of options and founders'    warrants                                                                                              |   |       |       |                               |         |        |         |      | (99     | )                |   |                     |   |              | 99                         |       |                                      |    |   |   |   |   |   |   |   |
| Deferred compensation arising from    shares of Arguin Communications issued to minority shareholders                                        |   |       |       |                               |         |        |         |      | 1,862   |             |   |                     |   |              | (1,862                     | )          |                                      |    |   |   |   |   |   |   |   |
| Amortization of deferred compensation                                                                                                        |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              | 2,378                      |       |                                      |    |   |   |   |   |   | 2,378 |   |
| Issuance of shares in connection    with the exercise of 75,557 founders' warrants and 12,480 options at an exercise    price of €2.29  |   |       | 88,037     |                               |         | 88          |         |      | 113     |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   | 201 |   |
| Issuance of shares in connection    with the exercise of 36,743 founders' warrants and 3,553 options at an exercise    price of €4.57   |   |       | 40,296     |                               |         | 41          |         |      | 144     |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   | 185 |   |
| Comprehensive income:                                                                                                                        |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   |   |   |
| Net income                                                                                                                                   |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      | 9,308   |   |   |   |   |   | 9,308 |   |
| Foreign currency translation                                                                                                                 |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      |    |   |   | 1,802  |   |   | 1,802 |   |
|                                                                                                                                         |   |       |       |                               |         |        |         |      |    |             |   |                          |   |                   |                       |            |                                      |
| Total    comprehensive income                                                                                                                |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      | 9,308   |   |   | 1,802  |   |   | 11,110 |   |
|                                                                                                                                         |   |            |       |                                    |         |             |         |           |    |                  |   |                          |   |                   |                       |            |                                      |
| Balance at December 31, 2001                                                                                                                 |   |       | 14,810,614 |                               |         | 14,811      |         |      | 135,013 |             |   | —                   |   |              | (2,991                     | )          |                                      | (25,671 | )      |   | 722    |   |   | 121,884 |   |
| Forfeiture of options and founders'    warrants                                                                                              |   |       |       |                               |         |        |         |      | (5      | )                |   |                     |   |              | 5                          |       |                                      |    |   |   |   |   |   |   |   |
| Deferred compensation arising from    shares of Arguin Communications issued to minority shareholders                                        |   |       |       |                               |         |        |         |      | 190     |             |   |                     |   |              | (190                       | )          |                                      |    |   |   |   |   |   |   |   |
| Amortization of deferred compensation                                                                                                        |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              | 2,201                      |       |                                      |    |   |   |   |   |   | 2,201 |   |
| Issuance of shares in connection    with the exercise of 154,075 founders' warrants and 25,026 options at an    exercise price of €2.29 |   |       | 179,101    |                               |         | 179         |         |      | 231     |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   | 410 |   |
| Issuance of shares in connection    with the exercise of 98,173 founders' warrants and 15,318 options at an exercise    price of €4.57  |   |       | 113,491    |                               |         | 113         |         |      | 405     |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   | 518 |   |
| Issuance of shares in connection    with the exercise of 4,684 options at an exercise price of €26.68                                   |   |       | 4,684      |                               |         | 5           |         |      | 120     |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   | 125 |   |
| Comprehensive income:                                                                                                                        |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   |   |   |
| Net income                                                                                                                                   |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      | 42,087  |   |   |   |   |   | 42,087 |   |
| Foreign currency translation                                                                                                                 |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      |    |   |   | (406   | ) |   | (406 | ) |
|                                                                                                                                         |   |       |       |                               |         |        |         |      |    |             |   |                          |   |                   |                       |            |                                      |
| Total    comprehensive income                                                                                                                |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      | 42,087  |   |   | (406   | ) |   | 41,681 |   |
|                                                                                                                                         |   |            |       |                                    |         |             |         |           |    |                  |   |                          |   |                   |                       |            |                                      |
| Balance at December 31, 2002                                                                                                                 |   |       | 15,107,890 |                               | €       | 15,108      |         | €    | 135,954 |             | € | —                   |   | €            | (975                       | )          | €                                    | 16,416  |   | € | 316    |   | € | 166,819 |   |
| Purchase of treasury stock                                                                                                                   |   |       |       |                               |         |        |         |      |    |             |   | (1,312                   | )      |              |                       |       |                                      |    |   |   |   |   |   | (1,312 | ) |
| Repurchase of minority interest                                                                                                              |   |       |       |                               |         |        |         |      | (249    | )                |   |                     |   |              |                       |       |                                      | 138     |   |   |   |   |   | (111 | ) |
| Forfeiture of options and founders'    warrants                                                                                              |   |       |       |                               |         |        |         |      | (116    | )                |   |                     |   |              | 116                        |       |                                      |    |   |   |   |   |   | — |   |
| Deferred compensation arising from    shares of Arguin Communications issued to minority shareholders                                        |   |       |       |                               |         |        |         |      | 315     |             |   |                     |   |              | (315                       | )          |                                      |    |   |   |   |   |   | — |   |
| Amortization of deferred compensation                                                                                                        |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              | 756                        |       |                                      |    |   |   |   |   |   | 756 |   |
| Issuance of shares in connection    with the exercise of 123,979 founders' warrants at an exercise price of €2.29                       |   |       | 123,979    |                               |         | 124         |         |      | 160     |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   | 284 |   |
| Issuance of shares in connection    with the exercise of 101,096 founders' warrants and 9,824 options at an exercise    price of €4.57  |   |       | 110,920    |                               |         | 111         |         |      | 396     |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   | 507 |   |
| Comprehensive income:                                                                                                                        |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   |   |   |
| Net loss (1)                                                                                                                                 |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      | (31,141 | )      |   |   |   |   | (31,141 | ) |
| Unrealized gain on financial instruments                                                                                                     |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      |    |   |   | 4,135  |   |   | 4,135 |   |
| Foreign currency translation                                                                                                                 |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      | 95      |   |   | (2,699 | ) |   | (2,604 | ) |
|                                                                                                                                         |   |       |       |                               |         |        |         |      |    |             |   |                          |   |                   |                       |            |                                      |
| Total    comprehensive income (loss) (1)                                                                                                     |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              | 95                         |       |                                      | (31,046 | )      |   | 1,436  |   |   | (29,610 | ) |
|                                                                                                                                         |   |            |       |                                    |         |             |         |           |    |                  |   |                          |   |                   |                       |            |                                      |
| Balance at December 31, 2003 (1)                                                                                                             |   |       | 15,342,789 |                               | €       | 15,343      |         | €    | 136,460 |             | € | (1,312                   | )      | €            | (323                       | )          | €                                    | (14,492 | )      | € | 1,752  |   | € | 137,333 |   |
|                                                                                                                                         |   |       |       |                               |         |        |         |      |    |             |   |                     |   |              |                       |       |                                      |    |   |   |   |   |   |   |   |

| (1) | Net loss, Total comprehensive        income (loss) and Total shareholders’ equity at and for the year        ended December 31, 2003, have been restated to correct an error in the        accounting related to the valuation allowance for deferred tax assets        for the year ended December 31, 2003. See Note 16 to the consolidated    financial statements. See notes to financial statements |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Wavecom Annual Report Form 20-F/A2003   F-5

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**WAVECOM S.A.CONSOLIDATED STATEMENTS OF CASH FLOWS**(inthousands, except share data)****

|                                                                                                                                          |   | **Years ended          December 31,** |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------|
|                                                                                                                                          |   |                                       |    |
|                                                                                                                                          |   | **2001**                              |    | **2002** |   | **2003 restated          (1)** |   |
|                                                                                                                                          |   |                                       |    |  |   |  |   |
| Cash flows from operating activities:                                                                                                         |   |                                  |    |   |   |   |   |   |   |   |
| Net income (loss)                                                                                                                             |   | €                                | 9,308   |   | € | 42,087 |   | € | (31,141 | ) |
|      Adjustments to reconcile net income    (loss) to net cash provided (used) by operating activities:              |   |                                  |    |   |   |   |   |   |   |   |
|      Depreciation and amortization of    property and equipment                                                      |   |                                  | 5,042   |   |   | 13,373 |   |   | 14,193 |   |
|      Provision for loss on long-term    investments                                                                  |   |                                  | 716     |   |   | — |   |   | — |   |
|      Amortization of goodwill                                                                                        |   |                                  | 278     |   |   | — |   |   | — |   |
|      Goodwill impairment                                                                                             |   |                                  | —  |   |   | — |   |   | 4,244 |   |
|      Amortization of deferred stock compensation                                                                     |   |                                  | 1,711   |   |   | 2,200 |   |   | 756 |   |
|      Minority interest                                                                                               |   |                                  | (804    | ) |   | (323 | ) |   | (38 | ) |
|      Deferred taxes                                                                                                  |   |                                  | —  |   |   | (11,931 | ) |   | 10,872 |   |
|      Increase (decrease) in cash from:                                                                               |   |                                  |    |   |   |   |   |   |   |   |
|           Accounts    receivable                                                            |   |                                  | (15,685 | ) |   | (49,192 | ) |   | 29,909 |   |
|           Inventory                                                                         |   |                                  | (2,431  | ) |   | (17,539 | ) |   | (5,092 | ) |
|           Value    added tax recoverable                                                    |   |                                  | (20,518 | ) |   | 15,821 |   |   | 4,195 |   |
|           Research    tax credit reimbursed                                                 |   |                                  | —  |   |   | 813 |   |   | — |   |
|           Prepaid    expenses and other current assets                                      |   |                                  | (9,951  | ) |   | 2,970 |   |   | (5,369 | ) |
|           Recoverable    taxes                                                              |   |                                  | —  |   |   | — |   |   | (9,913 | ) |
|           Accounts    payable and other accrued expenses                                    |   |                                  | 85,409  |   |   | 21,234 |   |   | (3,652 | ) |
|           Accrued    compensation                                                           |   |                                  | 2,105   |   |   | 5,083 |   |   | (3,710 | ) |
|           Deferred    revenue and advances received from customers                          |   |                                  | (1,668  | ) |   | 1,887 |   |   | (2,136 | ) |
|           Income    tax payable                                                             |   |                                  | —  |   |   | 13,605 |   |   | (13,605 | ) |
|           Other    payables                                                                 |   |                                  | 70      |   |   | (99 | ) |   | 59 |   |
|           Other                                                                             |   |                                  | (3,584  | ) |   | 1,878 |   |   | 4,553 |   |
|                                                                                                                                          |   |                                       |    |  |   |  |   |
|                Net    cash provided (used) by operating activities |   |                                  | 49,998  |   |   | 41,867 |   |   | (5,875 | ) |
|                                                                                                                                          |   |                                       |    |  |   |  |   |
| Cash flows from investing activities:                                                                                                         |   |                                  |    |   |   |   |   |   |   |   |
|      Acquisition of Iconn Wireless                                                                                   |   |                                  | (4,719  | ) |   | — |   |   | — |   |
|      Arguin acquisition, net of cash    acquired                                                                     |   |                                  | 462     |   |   | — |   |   | — |   |
|      Disposal (acquisition) of short-term    investments                                                             |   |                                  | 23,799  |   |   | (12,104 | ) |   | 15,111 |   |
|      Acquisition of long-term investments                                                                            |   |                                  | (113    | ) |   | (10,676 | ) |   | (2,350 | ) |
|      Repurchase of minority interest    in Arguin                                                                    |   |                                  | —  |   |   | — |   |   | (249 | ) |
|      Purchases of property and equipment                                                                             |   |                                  | (10,330 | ) |   | (27,307 | ) |   | (11,241 | ) |
|      Proceeds from sale of property and    equipment                                                                 |   |                                  | —  |   |   | 177 |   |   | 76 |   |
|                                                                                                                                          |   |                                       |    |  |   |  |   |
|                Net    cash provided (used) by investing activities |   |                                  | 9,099   |   |   | (49,910 | ) |   | 1,347 |   |
|                                                                                                                                          |   |                                       |    |  |   |  |   |
| Cash flows from financing activities:                                                                                                         |   |                                  |    |   |   |   |   |   |   |   |
|      Net increase (decrease) in overdrafts    and lines of credit                                                    |   |                                  | (529    | ) |   | — |   |   | — |   |
|      Repayment of loans                                                                                              |   |                                  | (146    | ) |   | (488 | ) |   | — |   |
|      Principal payments on capital lease    obligations                                                              |   |                                  | (815    | ) |   | (237 | ) |   | (743 | ) |
|      Purchases of treasury stock                                                                                     |   |                                  | —  |   |   | — |   |   | (1,312 | ) |
|      Proceeds from exercise of stock    options and founders' warrants                                               |   |                                  | 386     |   |   | 1,054 |   |   | 791 |   |
|                                                                                                                                          |   |                                       |    |  |   |  |   |
|                Net    cash provided (used) by financing activities |   |                                  | (1,104  | ) |   | 329 |   |   | (1,264 | ) |
|                                                                                                                                          |   |                                       |    |  |   |  |   |
| Effect of exchange rate changes    on cash and cash equivalents                                                                               |   |                                  | 1,755   |   |   | (1,842 | ) |   | (2,919 | ) |
| Net increase (decrease) in cash    and cash equivalents                                                                                       |   |                                  | 59,748  |   |   | (9,556 | ) |   | (8,711 | ) |
| Cash and cash equivalents, beginning    of period                                                                                             |   |                                  | 69,224  |   |   | 128,972 |   |   | 119,416 |   |
|                                                                                                                                          |   |                                       |    |  |   |  |   |
| Cash and cash equivalents, end of    period                                                                                                   |   | €                                | 128,972 |   | € | 119,416 |   | € | 110,705 |   |
|                                                                                                                                          |   |                                       |    |  |   |  |   |

| (1) | Net income (loss) and Deferred taxes for the year ended December 31, 2003, havebeen restated to correct an error in the accounting related to the valuationallowance for deferred tax assets for the year ended December 31, 2003. See Note16 to the consolidated financial statements. See notes to financial statements |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

F-6   Wavecom Annual Report Form 20-F/A    2003

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**WAVECOM S.A**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

| **1.** | **Nature of business and summary    of significant accounting policies** |
|--------|--------------------------------------------------------------------------|

*Nature of business*

Wavecom is organized as a *société anonyme*, or limited liability company, under the laws of the Republic of France. Wavecom was founded in 1993 and is publicly traded on Euronext Paris (Nouveau Marché) in France and on the Nasdaq (National Market) exchange in the U.S. It provides the wireless market with complete technology solutions for vertical applications (including machine-to-machine, automobiles and wireless local loop) and personal communications devices (PCDs, including telephone handsets and smartphones). Wavecom's complete solutions are based on GSM, GPRS and CDMA mobile communications standards and include products called the Wismo (Wireless Standard Module) which are compactstandardized devices that contains substantially all of the software, hardware and other technology (including memory) needed to enable wireless communications targeting vertical applications. Wavecom also manufactures a line of wireless modems which also addresses vertical applications. Wavecom's complete wireless solutions are sold via its direct sales force and a network of value added distributors and manufacturers representatives. 

*Basis of presentation*

The accompanying financial statements were prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying footnotes. Actual results could differ from those estimates. The consolidated financial statements include the accounts of Wavecom S.A., its wholly-owned subsidiaries Wavecom, Inc. (a Delaware corporation) and Wavecom Asia Pacific Ltd. (a Hong Kong corporation), both of which commenced operations in 1998; Wavecom Korea Co. Ltd and Wavecom Deutschland GmbH, branches transformed into subsidiaries in2002; Wavecom Northern Europe Ltd (an English company) created in 2003 and Arguin Communications Inc. (61.88% controlling interest purchased in October 2000). Inter-company accounts and transactions have been eliminated in consolidation. Certain prior year amounts may have been reclassified to conform to current year presentation. 

*Foreign currency*

The reporting currency of Wavecom, for all years presented, is the euro (€). 

The functional currency of each subsidiary is its local currency. In accordance with Statement of Financial Accounting Standards No. 52, all accounts in the financial statements are translated into euro from the functional currency at exchange rates as follows: (1) asset and liability accounts at year-end rates, (2) income statement accounts at weighted average exchange rates for the year, and (3) shareholders' equity accounts at historical exchange rates. Translation differences are recorded in shareholders' equity. 

Realized and unrealized foreign currency transaction gains and losses are reflected in net income. 

*Financial instruments*

Wavecom operates internationally, giving rise to exposure to changes in foreign currency exchanges rates, the U.S. dollar in particular. 

Wavecom uses financial instruments, including derivatives such as foreign currency forward and options contracts, to reduce the foreign exchange risk on cash flows from transactions with subsidiaries denominated in U.S. dollar. The Company complies with the Financial Accounting Standards Board issued Statement No 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 133), as amended by SFAS 137 and 138. SFAS 133 requires the recognition of all derivatives at fair value. Changes in fair value are recorded in current earnings or other comprehensive income, depending on whether the derivative is designated as part of a hedging transaction and the type of hedgetransaction. The ineffective portion of a derivative's change in fair value is immediately recognized in earnings. Fair value is determined by reference to published exchange rates. 

Wavecom Annual Report Form 20-F/A    2003   F-7

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*Revenue recognition*

Revenue is recognized when all of the following circumstances are satisfied: persuasive evidence of an agreement exists, the price is fixed or determinable, collection is reasonably assured and delivery has occurred. 

Revenue from product sales is recognized at the time the units are shipped and the risk of ownership is transferred. 

Revenue from technical support and product development services and other service revenue is recognized when the service is performed, there is no material continuing performance obligation and collection is probable. Under certain technology development agreements, where significant technological risk factors exist, costs are expensed as incurred and revenues are recognized when all obligations under the agreement have been met. 

*Shipping and handling costs*

Shipping and handling costs incurred by the Company are reflected in cost of goods sold. 

*Research and development*

Wavecom charges all research and development costs to expense as incurred. 

*Advertising costs*

The Company expenses advertising costs as incurred. Advertising expenses totaled €6,699,000 and €1,715,000 for the years ended 2003 and 2002, respectively. Amounts in 2003 are linked to Wavecom's first press campaign, started at the end of 2002 and finished during the first half of 2003. Amounts in 2001 were not significant. 

*Net income (loss) per share*

Net income (loss) per share amounts are computed using the weighted average number of shares outstanding. 

In accordance with SFAS 128 *Earnings per Share,* basic and diluted earnings per share are presented. Basic earnings per share excludes the dilutive effects of options and warrants, and reflects only the actual ordinary shares outstanding. The effect of options and warrants outstanding in 2003 have been excluded from the 2003 calculation of diluted earnings per share as Wavecom reported a net loss in the year ended December 31, 2003, and their effect is anti-dilutive. In 2001 and 2002, diluted earnings per share includes the effects of dilutive options and warrants as if they had been exercised. 

*Concentration of risk*

Financial instruments that potentially subject Wavecom to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables. 

Wavecom has cash investment policies that limit investments to short-term low-risk instruments. Wavecom's cash is held principally in euros and United States dollars and concentrated primarily in five major banks and financial institutes in Paris and three major banks in Hong Kong. 

As of December 31, 2003, Wavecom sub-contracts the manufacturing and assembly of its products to three suppliers located in France, Romania and China. Wavecom believes that alternate sub-contractors can be identified if the current manufacturers are unable to meet Wavecom's requirements. During the fourth quarter of 2003, Wavecom decided to consolidate all production with one sub-contractor located in China. The transfer should be effective during the course of2004. 

Wavecom sells its products to customers in a variety of industries principally in Asia/Pacific, Europe, North America and Africa. Wavecom performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses. To date, such losses have been within management's expectations. Wavecom generally requires no collateral, but does request advance payments or letters of credit in order to secure payment in certain circumstances. 

Accounts receivable (before allowance for doubtful accounts) at December 2001, 2002 and 2003 totaled €46,547,000, €86,164,000 and €46,488,000, respectively. 

F-8   Wavecom Annual Report Form 20-F/A    2003

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A summary of the activity in the allowance for doubtful accounts is as follows (amounts in thousands): 

| **Year ended  December 31,** |   | **Beginning balance** |   | **Additions charged  to expenses** |   | **Recovered receivables** |   | **Ending balance** |   |
|------------------------------|--------|-----------------------|--------|------------------------------------|--------|---------------------------|--------|--------------------|--------|
|                              |   |                       |        |                               |        |                           |   |                    |        |   |  |  |   |
| 2001                         |   | €                | 477    |                               | € | 164                       |   | €             | 313    |   | € | 328 |   |
| 2002                         |   |                  | 328    |                               |   | 119                       |   |               | 204    |   |   | 243 |   |
| 2003                         |   |                  | 243    |                               |   | 1,622                     |   |               | — |   |   | 1,865 |   |

The increase in the allowance for doubtful accounts was related primarily to two European distributors, who were replaced during 2003 as Wavecom expanded it distribution network in the region. Wavecom is in litigation with one of these distributors in an attempt to recover a total of €700,000 owed to Wavecom. 

For the years ended December 31, 2001, 2002 and 2003, certain customers represented revenues in excess of 10% of Wavecom's total consolidated revenues. The amounts of annual revenues, and corresponding outstanding accounts receivable at December 31, from these customers were as follows (in thousands): 

|       |   | **2001**     |    | **2002**       |   | **2003**     |   |
|------------|--------|--------------|---------|----------------|--------|--------------|--------|
|       |   |              |    |                |   |              |   |
|       |   | **Revenues** |    | **Receivable** |   | **Revenues** |   | **Receivable** |   | **Revenues** |   | **Receivable** |   |
|       |   |              |    |                |   |              |   |  |   |  |   |  |   |
| Customer A |   | €       | 106,162 |           | € | 15,817       |   | € | 368,402 |   | € | 56,633 |   | € | 53,505 |   | € | 4,618 |   |
| Customer B |   |         | —  |           |   | —       |   |   | 12,249 |   |   | 3,925 |   |   | 50,493 |   |   | 5,711 |   |
| Customer C |   |         | 14,411  |           |   | 5,444        |   |   | 13,790 |   |   | 3,309 |   |   | 33,284 |   |   | 9,353 |   |
| Customer D |   |         | 114,130 |           |   | 12,780       |   |   | 42,047 |   |   | 594 |   |   | 5,674 |   |   | — |   |

Sales to customers by geographic region are summarized as follows (in thousands): 

|           |   | **Years ended          December 31,** |    |
|----------------|--------|---------------------------------------|---------|
|           |   |                                       |    |
|           |   | **2001**                              |    | **2002** |   | **2003** |   |
|           |   |                                       |    |  |   |  |   |
| China          |   | €                                | 126,860 |   | € | 396,030 |   | € | 159,339 |   |
| South Korea    |   |                                  | 114,180 |   |   | 47,835 |   |   | 17,069 |   |
| Rest of Asia   |   |                                  | 28,662  |   |   | 8,294 |   |   | 14,712 |   |
| France         |   |                                  | 6,028   |   |   | 9,401 |   |   | 9,226 |   |
| Rest of Europe |   |                                  | 37,793  |   |   | 51,613 |   |   | 57,667 |   |
| Americas       |   |                                  | 3,509   |   |   | 25,082 |   |   | 7,604 |   |
| Rest of world  |   |                                  | 5,632   |   |   | 12,834 |   |   | 10,011 |   |
|           |   |                                       |    |  |   |  |   |
|           |   | €                                | 322,664 |   | € | 551,089 |   | € | 275,628 |   |
|           |   |                                       |    |  |   |  |   |

Geographic region is determined by the customer's invoice address and may not indicate the final destination of product usage. 

Substantially all of the Company's long-lived assets are located in France. 

*Cash and cash equivalents*

Wavecom considers all highly liquid investments with insignificant interest risk, and purchased with an original maturity of three months or less, to be cash equivalents. At December 31, 2001, 2002 and 2003, Wavecom had amounts of €83,680,000 (of which €12,794,000 was denominated in U.S. dollars), €92,826,000 and €101,441,000 respectively, invested in money market accounts with no fixed maturity, earning interest at short-term variable rates. At December 31, 2001, 2002 and 2003, the book value of these cash equivalents approximated their market value. 

Wavecom Annual Report Form 20-F/A    2003   F-9

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*Short-term investments*

As of December 31, 2001 and 2002, the Company held deposit certificates of €2,994,000 and €15,112,000, respectively. These investments were classified as available-for-sale and were carried at cost which approximated market value at December 31, 2001 and 2002. These certificates matured during 2003. 

*Inventory*

Inventories are valued at the lower of cost or market. 

*Value added tax recoverable*

Value added tax recoverable consists of value added tax paid by Wavecom to vendors and suppliers located in the European Union and recoverable from the tax authorities. Value added tax recoverable is collected on a monthly basis. As of December 2001, 2002 and 2003, the Company had value added tax credits, immediately recoverable, of €20,600,000, €2,350,000 and €750,000, respectively. 

*Property and equipment*

Property and equipment is stated at cost. Leases are capitalized in accordance with Financial Accounting Standards Board Statement No 13 *Accounting for leases* (SFAS 13). Depreciation and amortization is computed using the straight-line method over the following estimated useful lives: 

| Laboratory equipment                      | 2-5 years                       |
|-------------------------------------------|---------------------------------|
| Computer equipment and purchased software | 1-4 years                       |
| Furniture and office equipment            | 3-5 years                       |
| Leasehold improvements                    | 10 years, or lease term if less |

Amortization of capitalized leased equipment is included in depreciation expense. 

Wavecom reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If factors indicate that long-lived assets should be evaluated for possible impairment, the Company uses an estimate of the undiscounted net cash flow over the remaining life of the long-lived assets in measuring whether the carrying value is recoverable. An impairment loss would be measured by reducing the carrying value to fair value, based on a discounted cash flow analysis. 

*Goodwill*

Goodwill represents the excess purchase price of net tangible and intangible assets acquired in business combinations over their estimated fair value. In accordance with Financial Accounting Standards Board statement No 142, *Goodwill and Other Intangible Assets (SFAS 142)*, the Company ceased amortizing goodwill on a straight-line basis as of January 1, 2002. Goodwill is tested for impairment on an annual basis and whenever indicators of impairment arise. During 2002, the Company performed the first of the required impairment tests of goodwill, as well as the annual test in the fourth quarter, which resulted in a finding that no impairment to goodwill existed. Impairment of goodwill recorded during2003 is described in note 6. 

*Long-term investments*

In October 2000, the Company purchased convertible preferred shares representing less than 1% of the capital of Cambridge Silicon Radio (C.S.R.), a British company, for €1,197,000. The cost method is used to account for this investment because the Company does not have the ability to exercise significant influence over the investee's operating and financial policies. During 2001 the Company recorded a provision for €716,000 to reflect the estimated decline in value of the investment. The estimated loss was determined based on a valuation used in recent financing rounds for C.S.R. No additional impairment charges were considered necessary during the years ended December 31, 2002 and 2003.

F-10   Wavecom Annual    Report Form 20-F/A 2003

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Bank guarantees of €2,868,000 and €13,110,000 were issued in December 2000 and in July 2002 in favor of the owners of leased office space, in order to secure annual lease payments. At December 31, 2001, 2002 and 2003, these guarantees were secured by the pledge of certificates of deposit and mutual funds for €2,994,000, €13,671,000 and €16,021,000 respectively. These pledged investments have been classified as long-term assets in the balance sheet. 

*Other assets*

Other assets included primarily security deposits. 

*Accrued royalties*

Wavecom's products are designed to conform to certain wireless industry standards. Certain essential technologies are patented and Wavecom uses these essential technologies under licensing agreements for which Wavecom pays royalties. Wavecom has concluded licensing agreements with six patent holders for technologies deemed to be essential for Wavecom's products. Two contracts were signed in 2003 and Wavecom is in the process of negotiating with other patent holders. Wavecom's management considers that it is probable that these other patent holders may claim that the technology covered by their patents is essential to Wavecom's products. 

The estimated cost of royalties, which may be due to other patent holders in connection with their technologies as well as yet unasserted claims, have been accrued in the financial statements, based on a percentage of consolidated product revenues. The ultimate royalty paid by the company may differ from the amounts accrued. 

*Warranty accrual*

The Company offers a warranty for all its products. The specific terms and conditions of those warranties vary depending upon the product sold and the customer. Wavecom accrues for the costs of providing warranty service at the time the product is shipped and the sale recorded. The provision is calculated based on a statistical rate which is continually revised for specific warranty issues and actual experience. This provision is reversed according to the following calculation: 20% after 3 months, an additional 30% after 6 months, another 30% after 8 months and 100% after 18 months. An additional accrual is recorded to cover known repair risks not included in the statistical provision. 

Factors that affect Wavecom's warranty liability include the number of units sold, historical and anticipated rates of warranty claims, and cost per claim. Wavecom periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. 

*Deferred revenue and advances received from customers*

Deferred revenue includes amounts invoiced to customers in accordance with the terms of technology development contracts, but deferred by the Company as the corresponding work has not yet been completed. Advances include cash received in advance of product shipments. 

*Fair value of financial instruments*

At December 31, 2001, 2002 and 2003, the carrying values of current financial instruments such as cash equivalents, accounts receivable, accounts payable, other receivables and accrued liabilities approximated their market values, based on the short-term maturities of these instruments. There was no long-term debt at December 31, 2001, 2002 or 2003. 

*Other long term liabilities*

As of December 31, 2003, other long term liabilities include a lease incentive payment received from one office landlord which is being amortized over the lease term. 

Other long-term liabilities at December 31, 2001 and 2002 are not material. 

*Income taxes*

In accordance with Statement of Financial Accounting Standards No. 109, the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is established if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. 

Wavecom Annual Report Form 20-F/A    2003   F-11

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*Employee stock options and warrants*

Wavecom accounts for stock options and warrants granted to employees in accordance with the provisions of Accounting Principles Board Statement No. 25, *Accounting for Stock Issued to Employees*. Under APB 25, no compensation expense is recognized for stock options and warrants issued to employees with an exercise price equal to the fair value of the underlying shares on the grant date Options and warrants issued with an exercise price less than the fair value result in deferred compensation which is amortized to expense over the vesting period. 

Statement of Financial Accounting Standards No. 123, *Accounting for Stock Based Compensation*, provides an alternative to APB 25 in accounting for stock-based compensation issued to employees. SFAS 123 provides for a fair-value-based method of accounting for employee stock options and similar equity instruments. Companies that elect to continue to account for stock-based compensation arrangements under APB 25 are required by SFAS 123 to disclose the pro forma effect on net income and net income per share as if the fair-value-based method proposed by SFAS 123 had been adopted. The table below illustrates the effect on net income and earnings per share if the Company had applied the fair valuerecognition provisions of FASB Statement No. 123, *Accounting for Stock-Based Compensation,* to stock-based employee compensation. 

The fair value for these options and founders' warrants was estimated at the date of grant using a Black-Scholes option pricing model with the following assumptions for the years ended December 31, 2001, 2002 and 2003: risk-free interest rates of 4.94% for 2001, 4.00% for 2002 and 3.00% for 2003, no expected dividends, volatility factors of 1.17 for 2002, 0.74 for 2002 and 0.97 for 2003, and a weighted average expected life of the options and founders' warrants of 5 years. 

|                                                                                                                                                           |   |   | **Years ended          December 31**               |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------|--------|
|                                                                                                                                                           |   |        |                                               |
|                                                                                                                                                           |   |   | **2001**                                           |   |   | **2002** |   |   | **2003** |   |
|                                                                                                                                                           |   |        |                                                    |   |  |  |   |  |  |   |
|                                                                                                                                                           |   |   | **(In thousands,          except per share data)** |   |
| Net income (loss), as reported                                                                                                                                 |   | € | 9,308                                              |   | € | 42,087 |   | € | (25,880 | ) |
| Add: Stock-based employee compensation expense included in reported net income (loss), net of related tax     effects                           |   |   | 2,378                                              |   |   | 2,200 |   |   | 756 |   |
| Deduct: Total stock-based employee compensation expense determined under fair value based method for all     awards, net of related tax effects |   |   | (27,600                                            | )      |   | (32,183 | ) |   | (14,677 | ) |
|                                                                                                                                                           |   |        |                                                    |   |  |  |   |  |  |   |
| Pro forma net income (loss)                                                                                                                                    |   | € | (15,914                                            | )      | € | 12,104 |   | € | (39,801 | ) |
|                                                                                                                                                           |   |        |                                                    |   |  |  |   |  |  |   |
| Earnings per share:                                                                                                                                            |   |   |                                               |   |   |   |   |   |   |   |
| Basic–as reported                                                                                                                |   | € | 0.63                                               |   | € | 2.82 |   | € | (1.71 | ) |
| Basic–pro forma                                                                                                                  |   | € | (1.08                                              | )      | € | 0.81 |   | € | (2.64 | ) |
| Diluted–as reported                                                                                                              |   | € | 0.61                                               |   | € | 2.74 |   | € | (1.71 | ) |
| Diluted–pro forma                                                                                                                |   | € | (1.08                                              | )      | € | 0.79 |   | € | (2.64 | ) |

*Comprehensive income*

Wavecom reports comprehensive income and its components in accordance with Statement of Financial Accounting Standards No. 130, *Reporting Comprehensive Income*. SFAS 130 requires foreign currency translation adjustments, to be included in other comprehensive income (€(2,383,000) at December 31, 2003). 

Other comprehensive income also includes realized and unrealized gains and losses on financial instruments deferred in accumulated other comprehensive income until the underlying transaction is recognized in earnings in accordance with SFAS 133 (€4,135,000 at December 31, 2003). 

F-12   Wavecom Annual Report Form 20-F/A    2003

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*Segment reporting*

In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, *Disclosures About Segments of an Enterprise and Related Information*, which established standards for the way public companies report information about operating segments in annual financial statements and required that those companies report selected information about operating segments in interim financial reports issued to shareholders. It also established standards for related disclosures about products and services, geographic areas and major customers. Management has determined that Wavecom operates as a single segment, as management internally evaluates the performance of theenterprise as a whole and not on the basis of separate business units. 

*Recent accounting pronouncements*

In January 2003, the FASB issued Interpretation No. 46, *Consolidation of Variable Interest Entities*, an Interpretation of ARB No. 51"(FIN 46). In December 2003, the FASB modified FIN 46 to make certain technical corrections and address certain implementation issues that had arisen. FIN 46 addresses when a company should include in its financial statements the assets, liabilities and activities of another entity. FIN 46 requires consolidation of a variable interest entity if the reporting entity is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the variable interest entity's residual returns or both. FIN 46was effective immediately for variable interest entities created after January 31, 2003. The Company will apply FIN 46, as revised, to variable interest entities created before February 1, 2003 as follows: (i) beginning January 1, 2004 for structures commonly referred to as special purpose entities as a cumulative effect of the accounting change as of that date; and (ii) at the end of the first reporting period in 2004 for other than special-purpose entities. 

The adoption of FIN 46 is not expected to have a significant impact on the Company's earnings or financial position. 

On May 15, 2003, the FASB issued Statement No. 150, *Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity*. Statement 150 establishes standards for classifying and measuring as liabilities certain financial instruments that embody obligations of the issuer and have characteristics of both liabilities and equity. Statement 150 represents a significant change in practice in the accounting for a number of financial instruments, including mandatorily redeemable equity instruments and certain equity derivatives that frequently are used in connection with share repurchase programs. We do not use such instruments. Statement 150 is effective for all financialinstruments created or modified after May 31, 2003, and to other instruments as of September 1, 2003. The adoption of Statement 150 on June 1, 2003 did not have any material impact on our financial position, results of operations or cash flows. 

**2.**      **Acquisitions**

*Iconn Wireless*

In December 2001, the subsidiary Wavecom Inc acquired Iconn Wireless, a company based in San Diego, California, enabling Wavecom to acquire technology and know-how for Code Division Multiple Access (CDMA) technology. Wavecom purchased Iconn Wireless for €5,270,000 including €625,000 in tangible and intangible assets. The difference between the purchase price and the amount of identifiable assets (€4,645,000) was allocated to goodwill but was not amortized, in accordance with SFAS 142. In connection with the acquisition, €1,339,000 in cash was placed in escrow by Wavecom. The cash was paid to the employees as certain technology milestones were achieved in 2002, and the company recognizedthe related charges as research and development expenses. 

*Arguin Communications Inc.*

In October 2000, Wavecom purchased a majority interest of 51% of the voting rights in Arguin Communications Inc., headquartered in San Diego, California, increased to 61.88% in January 2001, which enabled Wavecom to have strategic control over the future technology to be developed by Arguin Communications Inc. 

The Company purchased Arguin Communications Inc. for €3,454,000 in cash including €691,000 for the purchase of existing shares (€ 229,000 paid in October 2000 and €462,000 paid in January 2001) and €2,763,000 to subscribe to a share capital increase. The total amount of this share capital increase, including minority interests, was €3,109,000. The net assets purchased included €270,000 in cash. The purchase price exceeded the fair value of the net tangible assets by € 1,323,000, which was allocated to goodwill and previously was being amortized over 5 years. In accordance with the provisions of SFAS 142, amortization of goodwill ceased as ofDecember 31, 2001. Deferred compensation of €1,862,000, €190,000 and €199,000 was recognized in 2001, 2002 and 2003, respectively, in connection with the issuance of shares of Arguin Communications to the majority shareholders and adjusted with the employee resignation. Amortization related to these shares amounted to €667,000, €613,000 and €648,000 in the years ended December 31, 2001, 2002 and 2003, respectively. 

Wavecom Annual Report Form 20-F/A    2003   F-13

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Results of operations of Arguin Communications Inc.    and Iconn Wireless are included in Wavecom's operating results from their    respective dates of acquisition. Pro Forma results of operations reflecting    these acquisitions have not been presented because the results of operations    of the acquired companies, either individually or collectively, are not material    to Wavecom's results of operations.

| **3.** | **Inventory** |
|--------|---------------|

Components of inventory are:

|                                   |   |               | **December 31,** |   |
|----------------------------------------|--------|--------------------|------------------|--------|
|                                   |   |                    |             |
|                                   |   |               | **2001**         |   |   | **2002** |   |   | **2003** |   |
|                                   |   |                    |                  |   |  |  |   |  |  |   |
|                                   |   | **(in thousands)** |             |
| Purchased components and raw materials |   | €             | 70               |   | € | 17,890 |   | € | 16,791 |   |
| Finished goods                         |   |               | 15,785           |   |   | 19,708 |   |   | 30,824 |   |
|                                   |   | €             | 15,855           |   | € | 37,598 |   | € | 47,615 |   |
| Provision for obsolete inventory       |   |               | 1,997            |   |   | 7,393 |   |   | 13,806 |   |
|                                   |   |                    |                  |   |  |  |   |  |  |   |
|                                   |   | €             | 13,858           |   | € | 30,205 |   | € | 33,809 |   |
|                                   |   |                    |                  |   |  |  |   |  |  |   |

In June 2002, Wavecom amended    contracts with two of its contract manufacturer to reflect its increased    role in negotiating terms and conditions directly with component suppliers,    as well as the overall evolution of Wavecom' s industrial and purchasing    organization. As a result of the changes in the contract terms, Wavecom believes    that it bears the risk of ownership of the components to be used for the    products, although these components continue to be legally owned by the contract    manufacturer. Therefore, at December 31, 2002 and 2003, inventory includes    these components, with a corresponding liability due to the contract manufacturer.

At December 31, 2002 and 2003,    the inventory of finished goods also includes €4,440,000 and €3,335,000,    respectively, held by contract manufacturers for which Wavecom bears the    risk of ownership.

| **4.** | **Property and equipment** |
|--------|----------------------------|

Property and equipment includes:

| ** **                                |   |   | **December 31,**   |   |
|-------------------------------------------|--------|--------|--------------------|--------|
|                                      |   |        |               |
| ** **                                |   |   | **2001**           |   |   | **2002** |   |   | **2003** |   |
| ** **                                |   |        |                    |   |  |  |   |  |  |   |
| ** **                                |   |   | **(in thousands)** |   |
| Laboratory and testing equipment          |   | € | 15,203             |   | € | 29,309 |   | € | 33,102 |   |
| Computer equipment and software           |   |   | 7,835              |   |   | 17,604 |   |   | 21,233 |   |
| Furniture and office equipment            |   |   | 2,288              |   |   | 2,801 |   |   | 2,977 |   |
| Leasehold improvements                    |   |   | 2,445              |   |   | 4,998 |   |   | 5,217 |   |
| Other                                     |   |   | 1,288              |   |   | 1,363 |   |   | 1,883 |   |
|                                      |   |        |                    |   |  |  |   |  |  |   |
|                                      |   |   | 29,059             |   |   | 56,075 |   |   | 64,412 |   |
| Accumulated depreciation and amortization |   |   | 13,393             |   |   | 26,451 |   |   | 36,550 |   |
|                                      |   |        |                    |   |  |  |   |  |  |   |
|                                      |   | € | 15,666             |   | € | 29,624 |   | € | 27,862 |   |
|                                      |   |        |                    |   |  |  |   |  |  |   |

Depreciation expense in the years ended December 2001, 2002 and 2003 totaled €5,068,000, €13,365,000 and €13,769,000, respectively.

Equipment purchased under capital leases in the years ended December 31, 2001, 2002 and 2003 totaled €291,000, €321,000 and €1,597,000, respectively. The cost of such equipment included in property and equipment at December 31, 2001, 2002 and 2003 totaled €4,755,000, €4,937,000 and €6,325,000, respectively. Accumulated amortization of this equipment totaled €4,343,000, €4,433,000 and €5,079,000 at December 31, 2001, 2002 and 2003, respectively.

F-14   Wavecom Annual Report Form 20-F/A    2003

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| **5.** | **Prepaid expenses and other    current assets** |
|--------|--------------------------------------------------|

Prepaid      expenses and other current assets include:

| ** **                                      |   |   | **December 31,**   |   |
|-------------------------------------------------|--------|--------|--------------------|--------|
|                                            |   |        |               |
| ** **                                      |   |   | **2001**           |   |   | **2002** |   |   | **2003** |   |
|                                            |   |        |               |        |  |   |  |  |   |
| ** **                                      |   |   | **(in thousands)** |   |
| Research tax credit: current portion            |   | € | 813                |   |   | — |   |   | — |   |
| Suppliers' credit note accruals                 |   |   | 5,717              |   |   | — |   | € | 267 |   |
| Prepaid expenses                                |   |   | 4,245              |   | € | 8,023 |   |   | 6,100 |   |
| Iconn Wireless amounts held in escrow           |   |   | 1,339              |   |   | — |   |   |   |   |
| Financial instruments                           |   |   | —             |   |   | — |   |   | 4,646 |   |
| Other current assets                            |   |   | 606                |   |   | 1,312 |   |   | 429 |   |
|                                            |   |        |                    |   |  |  |   |  |  |   |
| Total prepaid expenses and other current assets |   | € | 12,720             |   | € | 9,335 |   | € | 11,442 |   |
|                                            |   |        |                    |   |  |  |   |  |  |   |

Credit notes from suppliers are accrued at the end of each period, based on amounts which have been negotiated and accepted by Wavecom's contract manufacturers. These amounts are recorded as reductions of cost of goods sold.

Prepaid expenses consist primarily of prepaid rent and other operating expenses. At December 31, 2002, the amount also included €2,009,000 in prepaid advertising expenses.

The following table presents the fair value of financial instruments at December 31, 2003:

| ** **                                                                                         |   |   | **Notional  Amount** |   |   | **Fair value**            |   |
|----------------------------------------------------------------------------------------------------|--------|--------|----------------------|--------|--------|---------------------------|--------|
|                                                                                               |   |        |                      |   |        |                           |   |
| ** **                                                                                         |   |   | **(in $ thousands)** |   |   | **(in € thousands)** |   |
| Fair Value hedges of net receivables invoiced in U.S. dollars and to be collected within 2 months: |   |   |                 |   |   |                      |   |
| Forward and option contracts selling U.S. dollars against euros                                    |   | $      | 14,500               |   | € | 383                       |   |
| Cash Flow hedges of net receivables transactions to be invoiced and collected within 1 year:       |   |   |                 |   |   |                      |   |
| Forward and option contracts selling U.S. dollars against euros                                    |   |   | 34,000               |   |   | 4,263                     |   |
|                                                                                               |   |        |                      |   |        |                           |   |
| Total                                                                                              |   | $      | 48,500               |   | € | 4,646                     |   |
|                                                                                               |   |        |                      |   |        |                           |   |

The net foreign currency exposure, presented in the table below, relates to Group transactions as of December 31, 2003. The assets and liabilities are the sum of all items denominated in foreign currencies within the Group converted into euros. The only significant amounts which have been hedged are those denominated in U.S. dollars.

| ** **                                                  |   |   | **USD**                              |   |   | **Other Currencies** |   |
|-------------------------------------------------------------|--------|--------|--------------------------------------|--------|--------|----------------------|--------|
|                                                        |   |        |                                      |   |        |                      |   |
| ** **                                                  |   |   | **(in thousands          of euros)** |   |
| Assets                                                      |   |   | 41,755                               |   |   | 1,442                |   |
| Liabilities                                                 |   |   | 344                                  |   |   | 1,477                |   |
| Net assets                                                  |   |   | 41,441                               |   |   | (35                  | )      |
| Hedging of net assets in foreign currencies (balance sheet) |   |   | 11,552                               |   |   | 0                    |   |
|                                                        |   |        |                                      |   |        |                      |   |
| Net assets after hedging                                    |   |   | 29,889                               |   |   | (35                  | )      |
|                                                        |   |        |                                      |   |        |                      |   |

The company enters into foreign exchange derivative financial instruments to reduce the foreign exchange rate risk of anticipated cash flows from transactions denominated in US dollars. The fair value of foreign currency related derivatives are included in the balance sheet in other assets. The earnings impact of cash flow hedges relating to forecasted transactions is reported in foreign exchange gain or loss. Realized and unrealized gains and losses on these instruments are deferred in accumulated other comprehensive income until the underlying transaction is recognized in earnings.

Wavecom Annual Report Form 20-F/A    2003   F-15

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During the year ended December 31,    2003, the Company recorded €4,135,000 in other comprehensive income    related to the effective portion of its cash flow hedges.

During the year ended December 31,    2003, the Company recognized a net loss of €56,000 related to the portion    of the hedging instrument the Company excluded from its assessment of hedge    effectiveness.

The financial instruments have maturity    dates of less than 12 months. Management believes counter-party risk    on financial instruments is minimal since the Company deals with major banks    and financial institutions.

| **6.** | **Goodwill and intangible assets** |
|--------|------------------------------------|

Goodwill was €5,716,000 and €4,807,000 as of December 31, 2001 and 2002 respectively, net of accumulated amortization of €326,000 and €274,000 at December 31, 2001 and 2002, respectively.

All goodwill is denominated in U.S. dollars and translated into euros at the exchange rate at each balance sheet date.

During the fourth quarter of 2003 the Company performed the required annual impairment test of goodwill, which resulted in a determination that impairment of goodwill existed related to the Iconn and Arguin acquisitions. This resulting charge of €4,244,000 is included in "amortization and impairment of goodwill" in the Company's statement of operations. The resulting impairment is primarily attributable to changes in the Company's strategy and evolution of its target markets. This test consisted of a comparison of the fair value of the reporting unit with its carrying amount, including the goodwill. The fair value of the reporting unit was determined based on the income approach, which estimates thefair value based on the future discounted cash flows.

The changes in the carrying amount of goodwill from December 31, 2001 through December 31, 2003, are as follows (in thousands):

|                                                |   |  **December 31,** |   |
|-----------------------------------------------------|--------|------------------------|--------|
|                                                |   |                        |        |  |  |  |  |  |  |   |
|                                                |   |  **2001**         |   |  **2002** |   |  **2003** |   |
|                                                |   |                        |        |   |  |  |   |  |  |   |
| Balance as of the beginning of the year             |   | €                 | 1,279  |   | € | 5,716 |   | € | 4,807 |   |
| Add: Goodwill acquired during the year              |   |                   | 4,645  |   |   | — |   |   | — |   |
| Less: Amortization of goodwill                      |   |                   | (279   | ) |   | — |   |   | — |   |
| Less: Impairment of goodwill                        |   |                   | — |   |   | — |   |   | (4,244 | ) |
| Impact of foreign currency fluctuations on goodwill |   |                   | 71     |   |   | (909 | ) |   | (563 | ) |
|                                                |   |                        |        |   |  |  |   |  |  |   |
| Balance as of the end of the year                   |   | €                 | 5,716  |   | € | 4,807 |   |   | — |   |
|                                                |   |                        |        |   |  |  |   |  |  |   |

The following table sets forth net income per share and ADS adjusted to exclude goodwill amortization recognized prior to the adoption of FAS 142 on January 1, 2002 (in thousands, except for per share and ADS amounts):

|                                          |   | **Year EndedDecember 31,2001** |   |
|-----------------------------------------------|--------|-------------------------------------|--------|
|                                          |   |                                     |        |   |
| Reported net income (loss)                    |   | €                              | 9,308  |   |
|                                          |   |                                     |        |   |
| Adjusted net income                           |   | €                              | 9,586  |   |
|                                          |   |                                     |        |   |
| **Net income (loss) per share–basic:**   |   |                                |   |   |
| Reported                                      |   | €                              | 0.63   |   |
| Add back: goodwill amortization               |   |                                | 0.02   |   |
|                                          |   |                                     |        |   |
| Adjusted                                      |   | €                              | 0.65   |   |
|                                          |   |                                     |        |   |
| **Net income (loss) per share–diluted:** |   |                                |   |   |
| Reported                                      |   | €                              | 0.61   |   |
| Add back: goodwill amortization               |   |                                | 0.02   |   |
|                                          |   |                                     |        |   |
| Adjusted                                      |   | €                              | 0.63   |   |
|                                          |   |                                     |        |   |

Other intangible assets are not materialto the financial statements.

F-16   Wavecom Annual Report Form 20-F/A    2003

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| **7.** | **Debt** |
|--------|----------|

The following table presents a summary of indebtedness as of:

|                                                        |   |   | **December 31,**   |   |
|-------------------------------------------------------------|--------|--------|--------------------|--------|
|                                                        |   |        |               |
|                                                        |   |   | **2001**           |   |   | **2002** |   |   | **2003** |   |
|                                                        |   |        |                    |   |  |  |   |  |  |   |
|                                                        |   |   | **(in thousands)** |   |
| Short-term debt:                                            |   |   |               |   |   |   |   |   |   |   |
| Interest-free loan from government agency                   |   | € | 488                |   |   | — |   |   | — |   |
| Current portion of capital lease obligation                 |   |   | 201                |   | € | 214 |   | € | 855 |   |
|                                                        |   |        |                    |   |  |  |   |  |  |   |
| Total short-term debt and current portion of long-term debt |   | € | 689                |   | € | 214 |   | € | 855 |   |
|                                                        |   |        |                    |   |  |  |   |  |  |   |
| Long-term debt:                                             |   |   |               |   |   |   |   |   |   |   |
| Long-term portion of capital lease obligation               |   | € | 228                |   | € | 287 |   | € | 425 |   |
|                                                        |   |        |                    |   |  |  |   |  |  |   |
| Total long-term debt, less current portion                  |   | € | 228                |   | € | 287 |   | € | 425 |   |
|                                                        |   |        |                    |   |  |  |   |  |  |   |

*Other debts*

Wavecom received an interest-free    loan from Coface (€294,000 at December 31, 1999, increased by €340,000    in 2000), an export credit agency of the French government. Timing of repayment    of the loan was based upon the actual sales generated by Wavecom's United    States subsidiary. Wavecom repaid €146,000 of the loan in the year ended    December 31, 2001 and the remaining €488,000 during the year ended    December 31, 2002.

*Leasing*

Future minimum lease payments under      capitalized lease obligations for the years ending December 31 are      as follows (in thousands):

|                                        |   |   |   |   |
|---------------------------------------------|--------|--------|--------|--------|
| 2004                                        |   | € | 925    |   |
| 2005                                        |   |   | 341    |   |
| 2006                                        |   |   | 79     |   |
| 2007                                        |   |   | 15     |   |
| 2008                                        |   |   | 9      |   |
|                                        |   |        |        |   |
| Total minimum lease payments                |   |   | 1,369  |   |
| Less amount representing interest           |   |   | (88    | )      |
|                                        |   |        |        |   |
| Present value of net minimum lease payments |   |   | 1,281  |   |
| Less current portion                        |   |   | 856    |   |
|                                        |   |        |        |   |
| Long-term portion                           |   | € | 425    |   |
|                                        |   |        |        |   |

*Interest*

Interest paid during the years ended    December 31, 2001, 2002 and 2003 totaled approximately €447,000, €515,000    and €668,000 respectively.

Wavecom Annual Report Form 20-F/A    2003   F-17

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| **8.** | **Other accrued expenses** |
|--------|----------------------------|

Other accrued expenses consist principally    of accruals for royalties, warranty costs and various other tax and general    expense.

| ** **             |   |   | **December 31,**   |   |
|------------------------|--------|--------|--------------------|--------|
|                   |   |        |               |
| ** **             |   |   | **2001**           |   |   | **2002** |   |   | **2003** |   |
|                   |   |        |                    |   |  |  |   |  |  |   |
| ** **             |   |   | **(in thousands)** |   |
| Accrued royalties      |   | € | 9,375              |   | € | 29,214 |   | € | 20,648 |   |
| Warranty accrual       |   |   | 2,392              |   |   | 3,810 |   |   | 3,780 |   |
| Other accrued expenses |   |   | 3,758              |   |   | 3,343 |   |   | 11,227 |   |
|                   |   |        |                    |   |  |  |   |  |  |   |
| Total                  |   | € | 15,525             |   | € | 36,367 |   | € | 35,655 |   |
|                   |   |        |                    |   |  |  |   |  |  |   |

Changes of accrued royalties, warranty accrual and other accrued expenses during the period are as follows (in thousands):

| ** **             |   | **Balance atDecember 31,2002** |   | **Accruals madeduring the period** |   | **Settlements madeduring the period** |   | **Changes in liability forpre-existing    accruals during the period, including expirations** |   | **Balance atDecember 31,2003** |   |
|------------------------|--------|--------------------------------|--------|------------------------------------|--------|---------------------------------------|--------|-----------------------------------------------------------------------------------------------|--------|--------------------------------|--------|
| ** **             |   |                                |        |                               |        |                                       |   |                                                                                               |        |                           |        |  |   |  |  |   |
| Accrued royalties      |   | €                         | 29,214 |                               | € | 9,791                                 |   | €                                                                                        | 9,281  |                           | € | 9,076 |   | € | 20,648 |   |
| Warranty accrual       |   |                           | 3,810  |                               |   | 6,678                                 |   |                                                                                          | 6,708  |                           |   |   |   |   | 3,780 |   |
| Other accrued expenses |   |                           | 3,343  |                               |   | 10,666                                |   |                                                                                          | 2,540  |                           |   | 242 |   |   | 11,227 |   |
| ** **             |   |                                |        |                               |        |                                       |   |                                                                                               |        |                           |        |  |   |  |  |   |
| Total                  |   | €                         | 36,367 |                               | € | 27,135                                |   | €                                                                                        | 18,529 |                           | € | 9,318 |   | € | 35,655 |   |
| ** **             |   |                                |        |                               |        |                                       |   |                                                                                               |        |                           |        |  |   |  |  |   |

Changes in accrued royalties during    the year ended December 31, 2003 included primarily accruals related    to patent holders with whom Wavecom concluded licensing agreement with during    the year. The terms of the agreements signed resulted in an adjustment of    estimates.

Other accrued expenses include a    provision of €5,834,000 for costs associated with an anticipated exiting    from leases on three properties. This provision is based on the Company's    estimates for all potential costs, including rent payments. This line item    also includes a provision for €2,900,000 of production expenses. See    note 11 "Retirement Accrual".

| **9.** | **Shareholders' equity** |
|--------|--------------------------|

At December 31, 2003, 15,342,789    shares were issued, each with a nominal value of €1 per share. After    taking into consideration the 156,345 shares repurchased during 2003 and    held in treasury, 15,186,444 shares are outstanding at December 31,    2003.

*General*

On February 12, 2003, Wavecom      initiated a share buyback program covering a maximum of 1,400,000 ordinary      shares, representing 9.45% of the capital. At December 31, 2003, Wavecom      held 156,345 shares pursuant to this program purchased for a total amount      of €1,312,215.

*Preemptive subscription rights*

Shareholders have preemptive rights    to subscribe on a pro rata basis for additional shares issued by Wavecom    for cash. Shareholders may waive such preemptive subscription rights at an    extraordinary general meeting under certain circumstances. Preemptive subscription    rights, if not previously waived, are transferable during the subscription    period relating to a particular offering of shares.

F-18   Wavecom Annual Report Form 20-F/A    2003

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*Dividend rights*

Dividends may be distributed from the statutory retained earnings and additional paid in capital, subject to the requirements of French law and Wavecom's by-laws. There were no distributable retained earnings at December 31, 2003. Dividend distributions by Wavecom, if any, will be made in euro. 

*Stock option and warrant plans*

The shareholders of Wavecom authorized the board of directors to grant founders' warrants to employees of the French parent company, stock options to employees of subsidiaries and warrants to members of the board of directors. Under the terms of the plans, the options and warrants give the right to purchase one share per option or warrant at an exercise price to be based on the stock market price of Wavecom shares on the grant date. 

Options and founders' warrants granted in 2001, 2002 and 2003 vest 25% per year over 4 years. The rights to exercise the warrants granted to Board members vest 331/3% per year over 3 years. 

Options expire 10 years after the grant date. Founders' warrants, which were issued to employees of the French parent company, expire after five years, as required by law. Any founders' warrants remaining unexercised at the expiration date automatically convert to stock options with a five-year term remaining. Founders' warrants were issued to French employees due to the existence of certain tax advantages (for both the employee and Wavecom) available in connection with the issuance of founders' warrants which are not available for stock option holders in France. Other than the expiration dates, the terms of the founders' warrants are identical to the stock options. Warrants granted to Board members expire afterfive years. Any unvested or unexercised options and founders' warrants are cancelled upon termination of employment. 

Wavecom Annual Report Form 20-F/A    2003   F-19

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A summary of the founders' warrants and warrants to Board members is as follows: 

|                                                                                           |       | **Founders' warrants to employees of the French parent company** |     | **Warrants to members of theboard of directors** |         |
|------------------------------------------------------------------------------------------------|------------|------------------------------------------------------------------|----------|--------------------------------------------------|--------------|
|                                                                                           |       |                                                                  |          |                                                  |              |
| Shareholders' meeting date                                                                     | 02/25/99   |                                                             | 03/15/00 |                                             | 06/27/00     |   | 12/20/00 |   | 06/29/01 |   | 12/19/01 |   | 06/17/02 |   | 05/22/03 |   | 03/15/00 |   | 06/27/00 |   | 06/29/01 |   | 06/17/02 |   | 05/22/03 |   |
| Total of warrants authorized                                                                   | 530 800    |                                                             | 300 000  |                                             | 100 000      |   | 400 000 |   | 600 000 |   | 250 000 |   | 590 000 |   | 290 000 |   | 15 000 |   | 15 000 |   | 30 000 |   | 20 000 |   | 40 000 |   |
| Board of directors date                                                                        | N/A        |                                                             | 03/30/00 |                                             | 06/27/00     |   | 06/27/00 |   | 07/24/00 |   | 12/20/00 |   | 06/29/01 |   | 12/19/01 |   | 07/09/02 |   | 03/25/03 |   | 05/22/03 |   | 08/27/03 |   | N/A |   | N/A |   | N/A |   | N/A |   | N/A |   |
| Total of warrants granted                                                                      | 530 800    |                                                             | 157 200  |                                             | 101 300      |   | 50 860 |   | 41 000 |   | 400 000 |   | 467 151 |   | 233 500 |   | 395 360 |   | 193 000 |   | 11 000 |   | 241 000 |   | 15 000 |   | 15 000 |   | 30 000 |   | 20 000 |   | 40 000 |   |
| Exercise price                                                                                 | €4.57 |                                                             | 139.52   |                                             | €103.23 |   | €103.23 |   | €136.62 |   | €69.86 |   | €34.66 |   | €41.09 |   | €39.18 |   | €8.07 |   | €11.18 |   | €11.40 |   | €150.72 |   | €103.23 |   | €34.66 |   | €42.46 |   | €11.18 |   |
| Total of warrants exercised                                                                    | 315 183    |                                                             | —   |                                             | —       |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   | — |   |
| Total of warrants cancelled at December 31,    2003                                       | 39 184     |                                                             | 38 500   |                                             | 29 500       |   | 11 550 |   | 13 500 |   | 101 148 |   | 56 660 |   | 30 000 |   | 30 275 |   | 3 500 |   | — |   | 10 000 |   | — |   | — |   | — |   | — |   | — |   |
| Total of warrants cancelled during    the year ended                                           | —     |                                                             | 11 100   |                                             | 27 000       |   | 3 330 |   | — |   | 40 008 |   | 39 564 |   | 6 000 |   | 30 275 |   | 3 500 |   | — |   | 10 000 |   | — |   | — |   | — |   | — |   | — |   |
| Total of warrants granted and not    exercised at        December 31, 2003 | 176 433    |                                                             | 118 700  |                                             | 71 800       |   | 39 310 |   | 27 500 |   | 298 852 |   | 410 491 |   | 203 500 |   | 365 085 |   | 189 500 |   | 11 000 |   | 231 000 |   | 15 000 |   | 15 000 |   | 30 000 |   | 20 000 |   | 40 000 |   |
| Total of warrants exercisable at    December 31,       2003                | 176 433    |                                                             | 111 120  |                                             | 62 790       |   | 34 285 |   | 23 450 |   | 223 560 |   | 255 594 |   | 101 750 |   | 128 382 |   | — |   | — |   | — |   | 15 000 |   | 15 000 |   | 20 000 |   | 6 666 |   | — |   |
| Expiration date(1)                                                                             | 02/24/04   |                                                             | 03/14/05 |                                             | 06/26/05     |   | 12/19/05 |   | 06/28/06 |   | 12/18/06 |   | 06/16/07 |   | 05/21/08 |   | 03/14/05 |   | 06/26/05 |   | 06/28/06 |   | 06/16/07 |   | 05/21/08 |   |   |   |   |   |   |   |   |   |
|                                                                                                |       |                                                             |     |                                             |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1) | Founders' warrants not exercised at the expiration date will be converted into stock options |
|-----|----------------------------------------------------------------------------------------------|

F-20   Wavecom Annual Report Form 20-F/A    2003

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A summary of the stock options is as follows: 

|                                                                               | **STOCK OPTIONS** |   |
|------------------------------------------------------------------------------------|-------------------|--------|
|                                                                               |                   |        |  |  |  |  |  |  |  |  |
| Shareholders' meeting date                                                         | 09/21/98          |   | 02/25/99 |   | 03/15/00 |   | 06/27/00 |   | 12/20/00 |   |
| Total of stock options authorized                                                  | 650 000      |   | 600 000 |   | 300 000 |   | 100 000 |   | 800 000 |   |
| Board of directors date                                                            | 09/21/98          |   | 02/09/99 |   | 04/27/99 |   |   |   | 03/30/00 |   | 06/27/00 |   | 06/27/00 |   | 07/24/00 |   | 12/20/00 |   | 03/14/01 |   |
| Total of stock options granted                                                     | 495 000      | (1)    | 50 000 |   | 530 800 | (1) | 37 500 |   | 1 500 |   | 157 200 | (1) | 5 700 |   | 101 300 | (1) | 2 710 |   | 50 860 | (1) | 41 000 | (1) | 400 000 | (1) | 90 590 |   | 61 000 |   |
| Exercise price                                                                     | €2.29        |   | €2.29 |   | €4.57 |   | €4.57 |   | €4.57 |   | €139.52 |   | €139.52 |   | €103.23 |   | €103.23 |   | €103.23 |   | €136.62 |   | €69.86 |   | €69.86 |   | €26.68 |   |
| Total of stock options exercised                                                   |              |   | 50 000 |   |   |   | 36 000 |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | 4 684 |   |
| Total of stock options cancelled        at December 31, 2003(2)               | 492 612      |   | — |   | 354 367 |   | 1 500 |   | — |   | 38 500 |   | 1 200 |   | 29 500 |   | 18 360 |   | 11 550 |   | 13 550 |   | 101 148 |   | 27 440 |   | 37 521 |   |
| Total    of stock options granted and not exercised at December 31, 2003 | 2 388        |   | — |   | 176 433 |   | — |   | 1 500 |   | 118 700 |   | 4 500 |   | 71 800 |   | 6 350 |   | 39 310 |   | 27 500 |   | 298 582 |   | 63 150 |   | 18 795 |   |
| Total    of stock options exercisable at December 31, 2003                    | 2 388        |   | — |   | — |   | — |   | — |   | — |   | 4 212 |   | — |   | 5 555 |   | — |   | — |   | — |   | 47 631 |   | 12 055 |   |
| Expiration date(1)                                                                 | 09/20/08          |   | 02/24/09 |   | 03/14/10 |   | 06/26/10 |   | 12/19/10 |   |

|                                                                               | **STOCK OPTIONS**   |   |
|------------------------------------------------------------------------------------|---------------------|--------|
|                                                                               |                     |   |
| Shareholders' meeting date                                                         | 06/29/01            |   | 12/19/01 |   | 06/17/02 |   | 05/22/03 |   |
| Total of stock options authorized                                                  | 1 200 000 |   | 450 000 |   | 840 000 |   | 440 000 |   |
| Board of directors date                                                            | 06/29/01            |   | 12/19/01 |   | 07/09/02 |   | 03/25/03 |   | 05/22/03 |   | 08/27/03 |   |
| Total of stock options granted                                                     | 467 151        | (1)    | 97 395 |   | 233 500 | (1) | 193 500 |   | 395 360 | (1) | 174 095 |   | 193 000 | (1) | 155 200 |   | 11 000 | (1) | 10 500 |   | 241 000 | (1) | 99 000 |   |
| Exercise price                                                                     | €34.66         |   | €34.66 |   | €41.09 |   | €41.09 |   | €39.18 |   | €39.18 |   | €8.07 |   | €8.07 |   | €11.18 |   | €11.18 |   | €11.40 |   | €11.40 |   |
| Total of stock options exercised                                                   |                |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Total    of stock options cancelled at December 31, 2003(2)                   | 56 660         |   | 32 070 |   | 30 000 |   | 91 500 |   | 30 275 |   | 76 945 |   | 3 500 |   | 17 500 |   | — |   | 2 000 |   | 10 000 |   | 5 000 |   |
| Total    of stock options granted and not exercised at December 31, 2003 | 410 491        |   | 65 325 |   | 203 500 |   | 102 000 |   | 365 085 |   | 97 150 |   | 189 500 |   | 137 700 |   | 11 000 |   | 8 500 |   | 231 000 |   | 94 000 |   |
| Total    of stock options exercisable at December 31, 2003                    | —              |   | 40 791 |   | — |   | 51 000 |   | — |   | 34 258 |   | — |   | — |   | — |   | — |   | — |   | — |   |
| Expiration date(1)                                                                 | 06/28/11            |   |   |   | 12/18/11 |   |   |   | 06/16/12 |   |   |   |   |   |   |   | 05/21/13 |   |   |   |   |   |   |   |
|                                                                                    |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1) | Options which will become exercisable after 5 years to the extent which the related founders' warrants expire unexercisable |
|-----|----------------------------------------------------------------------------------------------------------------------------------|

| (2) | Stock options cancelled, to be granted by futur board of directors |
|-----|--------------------------------------------------------------------|

Wavecom Annual Report Form 20-F/A    2003   F-21

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In connection with the issuance of the founders' warrants and options granted in September 1998 and February 1999, Wavecom recorded deferred compensation of €2,022,000 and €5,344,000, respectively. Deferred compensation was amortized on a straight line basis over the four-year vesting periods of the warrants and options. For the years ended December 31, 2001, 2002 and 2003, Wavecom recorded compensation expense of €1,711,000, €1,587,000 and €205,000 respectively, resulting from amortization of deferred compensation. 

A summary of the activity in the warrants and stock options is as follows: 

|                         |   |   | **Number of****shares** |   | **Weighted average****exercise price per share****€** |   | **Price range****€** |   |
|------------------------------|--------|--------|-------------------------|--------|------------------------------------------------------------|--------|---------------------------|--------|
|                         |   |   |                         |   |                                                            |   |                           |   |
| Balance at December 31, 2000 |   |   | 1,735,692               |   | 49.65                                                      |   | 2.29 -                    |   | 150.72 |   |
| Granted                      |   |   | 1,082,546               |   | 36.75                                                      |   | 26.68 -                   |   | 41.09 |   |
| Exercised                    |   |   | (128,333                | )      | 3.00                                                       |   | 2.29 -                    |   | 4.57 |   |
| Cancelled                    |   |   | (115,812                | )      | 78.17                                                      |   | 2.29 -                    |   | 139.52 |   |
|                         |   |   |                         |   |                                                       |   |                      |   |   |   |
| Balance at December 31, 2001 |   |   | 2,574,093               |   | 45.27                                                      |   | 2.29 -                    |   | 150.72 |   |
| Granted                      |   |   | 589,455                 |   | 39.29                                                      |   | 39.18 -                   |   | 42.46 |   |
| Exercised                    |   |   | (297,276                | )      | 3.54                                                       |   | 2.29 -                    |   | 26.68 |   |
| Cancelled                    |   |   | (87,176                 | )      | 49.77                                                      |   | 4.57 -                    |   | 139.52 |   |
|                         |   |   |                         |   |                                                       |   |                      |   |   |   |
| Balance at December 31, 2002 |   |   | 2,779,096               |   | 48.32                                                      |   | 2.29 -                    |   | 150.72 |   |
| Granted                      |   |   | 749,700                 |   | 9.84                                                       |   | 8.07 -                    |   | 11.40 |   |
| Exercised                    |   |   | (234,899                | )      | 3.37                                                       |   | 2.29 -                    |   | 4.57 |   |
| Cancelled                    |   |   | (429,368                | )      | 49.67                                                      |   | 8.07 -                    |   | 139.52 |   |
|                         |   |   |                         |   |                                                       |   |                      |   |   |   |
| Balance at December 31, 2003 |   |   | 2,864,529               |   | 41.73                                                      |   | 2.29 -                    |   | 150.72 |   |
|                         |   |   |                         |   |                                                       |   |                      |   |   |   |

At December 31, 2003, 1,371,650, founders' warrants, stock options and warrants were exercisable (1,146,564 and 486,497 at December 31, 2002 and 2001, respectively). 

The weighted-average remaining contractual life of the warrants and stock options outstanding at December 31, 2003 was approximately 8 years. 

The weighted-average fair value of options and warrants granted during 2001, 2002 and 2003 was as follows: 

|                                                                                             |   |   | **2001** |   |   | **2002** |   |   | **2003** |   |
|--------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
|                                                                                             |   |        |          |   |        |          |   |        |          |   |
| Options whose price equaled market price of the underlying shares on the grant date              |   |   | —   |   |   | —   |   |   | —   |   |
| Options whose price was less than the market price of the underlying shares on the grant date    |   | € | 34.99    |   |   | —   |   | € | 5.38     |   |
| Options whose price was greater than the market price of the underlying shares on the grant date |   | € | 26.16    |   | € | 31.48    |   | € | 8.30     |   |

F-22   Wavecom Annual Report Form 20-F/A    2003

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**10.**      **Income taxes**

Income tax expense comprises: 

|                           |   |   | **Years ended          December 31,** |   |
|--------------------------------|--------|--------|---------------------------------------|--------|
|                           |   |        |                                       |        |  |  |  |  |  |   |
|                           |   |   | **2001**                              |   |   | **2002** |   |   | **2003 Restated      (1)** |   |
|                           |   |        |                                       |   |  |  |   |  |  |   |
|                           |   |   | **(in thousands)**                    |   |
| Current tax expense (benefit)  |   | € | (2,299                                | )      | € | 18,487 |   | € | (10,011 | ) |
| Deferred tax expense (benefit) |   |   | —                                |   |   | (11,931 | ) |   | 10,872 |   |
|                           |   |        |                                       |   |  |  |   |  |  |   |
| Total                          |   | € | (2,299                                | )      | € | 6,556 |   | € | 861 |   |
|                           |   |        |                                       |   |  |  |   |  |  |   |
|                                |   |   |                                  |   |   |   |   |   |   |   |

| (1) | Deferred tax expense for the        year ended December 31, 2003, has been restated to correct an error in        the accounting related to the valuation allowance for deferred tax assets    for that year. See Note 16 to the consolidated financial statements. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Taxes paid totaled approximately €19,000, €462,000 and €21,296,000 (including €7,670,000 in estimated income tax payments for 2003 which are expected to be reimbursed in 2004) in the years ended December 31, 2001, 2002 and 2003, respectively. 

The income tax benefit in 2001 is the net of a research tax credit (€2,535,000), French current tax expense (€19,000) and income tax expense of Wavecom's Asian subsidiary (€217,000). 

The current tax expense in 2002 is the net of research tax credit (€449,000), French current tax expense (€15,790,000) and income tax expense of Wavecom's Asian (€3,139,000) and Wavecom's German (€7,000) subsidiaries. 

The current tax expense in 2003 is the net of research tax credit (€1,355,000), French current tax expense (€21,000), tax loss carrybacks (€10,872,000) and income tax benefit of Wavecom's Asian subsidiary (€119,000). Research tax credit and tax loss carrybacks are recorded as recoverable taxes to the balance sheet. 

A reconciliation of income taxes computed at the French statutory rate (35.3% in 2001, 35.4% in 2002 and 33.33% in 2003) to the income tax expense (benefit) is as follows: 

|                                                     |   |   | **Years ended          December 31,** |   |
|----------------------------------------------------------|--------|--------|---------------------------------------|--------|
|                                                     |   |        |                                       |        |  |  |  |  |  |   |
|                                                     |   |   | **2001**                              |   |   | **2002** |   |   | **2003 Restated     (1)** |   |
|                                                     |   |        |                                       |   |  |  |   |  |  |   |
|                                                     |   |   | **(in thousands)**                    |   |
| Income tax expense computed at the French statutory rate |   | € | 2,474                                 |   | € | 17,220 |   | € | (10,092 | ) |
| Research tax credit                                      |   |   | (2,535                                | )      |   | (449 | ) |   | (1,355 | ) |
| Impact of valuation allowance on deferred tax assets     |   |   | (3,174                                | )      |   | (7,736 | ) |   | 12,127 |   |
| Other individually immaterial permanent differences      |   |   | 33                                    |   |   | 45 |   |   | (56 | ) |
| Non-deductible deferred compensation amortization        |   |   | 839                                   |   |   | 779 |   |   | 252 |   |
| Impact of differences in foreign income tax rates        |   |   | —                                |   |   | (3,320 | ) |   | — |   |
| Other                                                    |   |   | 64                                    |   |   | 17 |   |   | (15 | ) |
|                                                     |   |        |                                       |   |  |  |   |  |  |   |
| Total income tax expense (benefit)                       |   | € | (2,299                                | )      | € | 6,556 |   | € | 861 |   |
|                                                     |   |        |                                       |   |  |  |   |  |  |   |
|                                                          |   |   |                                  |   |   |   |   |   |   |   |

| (1) | The impact of the valuation allowance on deferred tax assets for the year ended December 31, 2003, has been restated to correct an error in accounting.  See Note 16 to the consolidated financial statements. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Wavecom Annual Report Form 20-F/A    2003   F-23

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Significant components of Wavecom's      deferred tax assets and liabilities consist of the following:

|                                                                  |   |  **December          31,**   |    |
|-----------------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                                  |   |                                   |         |  |  |  |  |  |  |   |
|                                                                  |   |  **2001**                    |    |  **2002** |   |  **2003          Restated (1)** |   |
|                                                                  |   |                                   |         |   |  |  |   |  |  |   |
|                                                                  |   |  **(in          thousands)** |    |
| Deferred tax assets: Royalty        accruals not currently deductible |   | €                            | 2,410   |   | € | 7,311 |   | € | 4,371 |   |
| Other provisions and accruals        not currently deductible         |   |                              | 1,285   |   |   | 4,620 |   |   | 7,500 |   |
| Capitalized leases                                                    |   |                              | 6       |   |   | — |   |   | — |   |
| Net operating loss carryforwards                                      |   |                              | 6,648   |   |   | 1,291 |   |   | 4,019 |   |
|                                                                  |   |                                   |         |   |  |  |   |  |  |   |
|                                                                  |   |                              | 10,349  |   |   | 13,222 |   |   | 15,890 |   |
| Valuation allowance                                                   |   |                              | (10,349 | ) |   | (1,291 | ) |   | (14,831 | ) |
|                                                                  |   |                                   |         |   |  |  |   |  |  |   |
| Net deferred tax asset (liability)                                    |   | €                            | —  |   | € | 11,931 |   | € | 1,059 |   |
|                                                                  |   |                                   |         |   |  |  |   |  |  |   |
|                                                                  |   |                              |    |   |   |   |   |   |   |   |

| (1) | Deferred tax assets and liabilities        at December 31, 2003, have been restated to correct an error in the accounting        related to the valuation allowance for deferred tax assets for that year.        See Note 16 to the consolidated financial statements. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Because of the significant losses      in 1999 and 2000, Wavecom recorded a valuation allowance against deferred      tax assets in 2001. The valuation allowance was reversed in 2002 due to      the use of all previous net operating losses in the company's primary tax      jurisdictions, 2002 taxable income, and because the company believed it      was more likely than not that the deferred taxes were recoverable. At December 31,      2003, a deferred tax of € 11,871,000 was recognized for the French      parent company. A valuation allowance of €10,812,000 was recorded      to reduce the net asset to the amount of available tax loss carrybacks      in France. 

After the option to carry back €25,674,000      of 2003 tax losses, a receivable of €8,558,000 was recorded at December 31,      2003. Net operating loss carryforwards in the United States totaled approximately €8,476,000      at December 31, 2003 (€3,647,000 in 2002) and will expire from      2013 to 2018 if not utilized. Net operating loss carryforwards in Asia      Pacific totaled approximately €3,581,000 at December 31, 2003      with no expiry date. The related deferred tax asset of €4,019,000      was recognized in 2003 (€1,291,000 in 2002), and was fully provided      for in the valuation allowance. 

| **11.** | **Commitments and contingencies** |
|---------|-----------------------------------|

*Bank guarantees*

At December 31, 2003, Wavecom      had two bank guarantees (€2,868,000 issued in 2000 and €13,110,000      issued in 2002) in favor of the owners of leased office space, in order      to secure annual lease payments. These credit lines were secured by the      pledge of certificates of deposit and mutual funds. The total value of      these pledged investments was €2,994,000, €13,671,000 and €16,021,000      at December 31, 2001, 2002 and 2003, respectively. 

*Operating leases*

Wavecom leases its facilities under      operating leases that expire through July 2011. Future minimum lease      payments under operating leases, excluding common area maintenance charges      and inflation escalation, due for the years ending December 31, are      as follows (in thousands): 

| 2004       |   | € | 10,991 |   |
|------------|--------|--------|--------|--------|
| 2005       |   |   | 10,447 |   |
| 2006       |   |   | 10,002 |   |
| 2007       |   |   | 9,623  |   |
| 2008       |   |   | 7,932  |   |
| Thereafter |   |   | 17,013 |   |
|       |   |        |        |   |
| Total      |   | € | 66,008 |   |
|       |   |        |        |   |

F-24   Wavecom Annual    Report Form 20-F/A 2003

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In 2003, Wavecom decided to vacate      certain of its premises and is actively pursuing subletting certain facilities.      These operating lease commitments include a total of approximately €13 million      in rent payments beginning January 2004 under the three leases related      to office space that Wavecom vacated. A provision of €5.8 million      for the estimated cost to terminate these lease commitments was recorded      at December 31, 2003. 

Rental expense, excluding common      area maintenance charges, for the years ended December 31, 2001, 2002      and 2003 was approximately €3,913,000, €8,350,000 and €11,238,000      respectively. 

*Retirement accrual*

Wavecom contributes to pensions      for personnel in France in accordance with French law by contributing amounts      based on salaries to the relevant government agencies. There exists no      actuarial liability in connection with these plans. French law also requires      payment of a lump sum retirement indemnity to employees based upon years      of service and compensation at retirement. Benefits do not vest prior to      retirement. Wavecom's obligation, for the years ended December 31,      2001, 2002 and 2003, amounted to €86,000, €159,000 and €247,000,      respectively, and is calculated as the present value of estimated future      benefits to be paid. 

The main assumptions used in the      calculation are the following: 

|   | • | Rate of discount: 5.50% (4.5%        in 2002) |
|--------|--------|-----------------------------------------------|
|   |   |                                          |

|   | • | Salary increase: 3% (5% in        2002) |
|--------|--------|-----------------------------------------|
|   |   |                                    |

|   | • | Retirement age: management:        65 years, other: 62 years (60 years in 2002 for management        and others) |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                            |

|   | • | Weighted average turnover:        1.43% (3.4% in 2002) |
|--------|--------|--------------------------------------------------------|

There are no retirement plans in      Hong Kong, Germany, Great Britain, South Korea and the United States. 

*Other commitments*

At December 31, 2003, Wavecom      had commitments outstanding to purchase €1,162,000 in fixed assets,      which are expected to be placed in service during the first half of 2004. 

At December 31, 2003, Wavecom      had purchase commitments with its third-party manufacturers for future      deliveries of products, principally during the first half of 2004. These      purchase commitments totaled €32,538,000. 

| **12.** | **Employees** |
|---------|---------------|

Information related to Wavecom's      employees is as follows: 

|                  |   |  **December          31,**                             |   |
|-----------------------|--------|-------------------------------------------------------------|--------|
|                  |   |                                                             |        |  |  |  |  |  |  |   |
|                  |   |  **2001**                                              |   |  **2002** |   |  **2003** |   |
|                  |   |                                                             |        |   |  |  |   |  |  |   |
|                  |   |  **(in          thousands, except for employee data)** |   |
| Salaries              |   | €                                                      | 17,694 |   | € | 33,983 |   | € | 41,300 |   |
| Benefits              |   | €                                                      | 7,558  |   | € | 12,353 |   | € | 13,730 |   |
| Employees at year end |   |                                                        | 421    |   |   | 666 |   |   | 692 |   |

| **13.** | **Compensation of executive          officers** |
|---------|-------------------------------------------------|

Wavecom paid €1,475,000, €2,277,000      and €2,359,000 in compensation to executive officers for the years      ended December 31, 2001, 2002 and 2003, respectively. 

Wavecom Annual Report Form 20-F/A    2003   F-25

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| **14.** | **Related party transactions** |
|---------|--------------------------------|

In December 2000, Wavecom      entered into a consulting agreement with Delphis. Delphis, represented      by Marc Fourrier, is a major shareholder and member of the board of directors.      The agreement calls for Mr. Fourrier to provide consulting services      in the areas of corporate organization, information systems and general      management from time to time, up to a maximum of two days per week. Such      services are compensated at the rate of €1,448 per day. During the      year ended December 31, 2003, Delphis invoiced €20,031 (€26,157      in 2002 and €17,303 in 2001). 

In November 2001, Wavecom      loaned $200,000 to a senior employee of the group. The loan bore a market      rate of interest, was repayable in three years and was secured by a lien      on the employee's residence. The loan and accrued interest were repaid      in full in February 2003. 

| **15.** | **Subsequent events (unaudited)** |
|---------|-----------------------------------|

Wavecom announced in October 2003      a plan to consolidate all production with one contract manufacturer located      in China as well as to reorganize its customer care unit. Under the restructuring      plan the Company will terminate a number of employees resulting in an accounting      impact which will be reflected in the 2004 financial statements because      benefit arrangements were not defined and announced to employees until      January 2004. 

On January 23, 2004, Wavecom      announced an additional plan to reduce headcount linked to the implementation      of a new organizational structure based on the two primary Wavecom sales      markets and on wireless silicon development. Once the plans are fully implemented,      the worldwide headcount is expected to be reduced by about 300 positions.      Primarily the entities in France and in the United States are concerned.      This plan is expected to cost approximately €10 to €15 million      related primarily to headcount reduction and associated charges, including      severance and outplacement packages. 

On February 20, 2004, Wavecom      signed a memorandum of understanding with the minority shareholders of      Arguin Communications, Inc. for the purchase of the remaining minority      interest in Arguin for a total of $2.135.625. As part of this agreement,      certain shareholders will enter into non-compete agreements for a period      of two years. 

On March 23, 2004, the board      of directors granted 38,000 founders' warrants to employees to the French      parent company and 3,000 stock options to an employee of Wavecom Asia Pacific,      Ltd. The exercise price of these plans was €9.62.

| **16.** | **Restatement** |
|---------|-----------------|

In February 2005, the Company identified      an error in the application of its 2003 tax loss carryback to the 2002      French tax return declaration. After the correction of this error, the      2003 tax loss carryback to 2002 was limited by the amount of research and      development tax credits actually applied to the Company's 2002 French income      tax due. As it was unlikely that the Company would realize deferred tax      assets resulting from its 2003 income tax losses in excess of the amount      carried back to 2002, it was required to record a full valuation allowance      on any remaining deferred tax assets resulting from unused net operating      tax losses. Accordingly, the Company has restated the valuation allowance      on its deferred tax assets for fiscal year 2003 to € 14.831 million      (€9.570 million as previously reported) reflecting an increase of €5.261      million. See Note 10 to the Company’s financial statements above,      which has been amended to reflect the restatement. The Company believes      that the error which led to the decision to restate its financial statements      for the year ended December 31, 2003, was the result of a material weakness      in internal control over income tax preparation and related financial reporting. 

F-26   Wavecom Annual    Report Form 20-F/A 2003

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The effect of the restatement on      the consolidated statements of operations for the year ended December 31,      2003 and for the three months ended June, 30 2003 is as follows: 

|                                      |   |   | As reported                                            |   |   | Restatement                       |   |   | Restated                                         |   |
|-------------------------------------------|--------|--------|--------------------------------------------------------|--------|--------|-----------------------------------|--------|--------|--------------------------------------------------|--------|
|                                      |   |        |                                                        |        |        |                                   |   |        |                                                  |        |  |  |   |  |  |  |  |  |   |
| In thousands except loss per        share |   |   | Three months ended      June 30, 2003      (unaudited) |   |   | Year ended      December 31, 2003 |   |   | Three months ended      June 30, 2003(unaudited) |   |   | Year ended      December 31, 2003 |   |   | Three months ended      June 30, 2003(unaudited) |   |   | Year ended      December 31, 2003 |   |
|                                      |   |        |                                                        |   |        |                                   |   |        |                                                  |   |  |  |   |  |  |   |  |  |   |
| Income tax expense (benefit)              |   | € | (2,168                                                 | )      | € | (4,400                            | )      | € | 5,261                                            |   | € | 5,261 |   | € | 3,093 |   | € | 861 |   |
| Net loss                                  |   | € | (6,533                                                 | )      | € | (25,880                           | )      | € | (5,261                                           | )      | € | (5,261 | ) | € | (11,794 | ) | € | (31,141 | ) |
| Basic net loss per share                  |   | € | (0.44                                                  | )      | € | (1.71                             | )      | € | (0.35                                            | )      | € | (0.35 | ) | € | (0.79 | ) | € | (2.06 | ) |
|                                      |   |   |                                                   |   |   |                              |   |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Diluted net loss per share                |   | € | (0.44                                                  | )      | € | (1.71                             | )      | € | (0.35                                            | )      | € | (0.35 | ) | € | (0.79 | ) | € | (2.06 | ) |

The effect of the restatement on      the selected balance sheets items at December 31, 2003 is as follows:

|                                        |   |  At        December 31, 2003 |    |
|---------------------------------------------|--------|-----------------------------------|---------|
|                                        |   |                                   |         |  |  |  |  |  |  |   |
| In thousands                                |   |  As        reported          |    |  Restatement |   |  Restated |   |
|                                        |   |                                   |         |   |  |  |   |  |  |   |
| Deferred tax assets, current        portion |   |                              | —  |   | € | 1,059 |   | € | 1,059 |   |
| Deferred tax assets                         |   | €                            | 6,320   |   | € | (6,320 | ) |   | — |   |
| Current assets                              |   | €                            | 210,483 |   | € | 1,059 |   | € | 211,542 |   |
| Total assets                                |   | €                            | 280,490 |   | € | (5,261 | ) | € | 275,229 |   |
| Total shareholders’ equity            |   | €                            | 142,594 |   | € | (5,261 | ) | € | 137,333 |   |

Wavecom Annual Report Form 20-F/A    2003   F-27

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|   |   |
|--------|--------|

| **Item    19.** | **Exhibits**                                                                                                                                                                                                                                                                                                                                |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|            |                                                                                                                                                                                                                                                                                                                                        |
| 1*              | Statuts (By-Laws) of the Registrant,        updated as of February 6, 2004 (English Translation).                                                                                                                                                                                                                                      |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 2.1             | Form of Deposit Agreement        among the Registrant, The Bank of New York, as Depositary, and the Holders        of American Depositary Shares issued thereunder (incorporated by reference        to Exhibit 4.1 to the Registrant's Registration Statement on Form F-1,        File No. 333-10372).                      |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 2.2             | Form of American Depositary        Receipt (incorporated by reference to Exhibit 4.2 to the Registrant's        Registration Statement on Form F-1, File No. 333-10372).                                                                                                                                                     |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 4.1**           | GSM Essential Properties Cross-License        Agreement, dated January 6, 1999, between the Registrant and Motorola,        Inc. (incorporated by reference to Exhibit 10.3 to the Registrant's        Registration Statement on Form F-1, File No. 333-10372).                                                              |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 4.2**           | Contract for Manufacturing and        Related Services, dated June 17, 1999 between Wavecom S.A. and Solectron-France        S.A. (incorporated by reference to Exhibit 10.3 to the Registrant's        Annual Report on Form 20-F, filed with the Commission on May 24,        2000).                                  |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 4.3**           | Agreement between Funkanlagen        and Wavecom S.A. dated February 25, 2000 (incorporated by reference        to Exhibit 10.4 to the Registrant's Annual Report on Form 20-F,        filed with the Commission on May 24, 2000).                                                                                      |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 4.4**           | GSM/DCS 1800/1900 Patent License        Agreement between Wavecom S.A. and Koninklijke Philips Electronics N.V.,        dated October 9, 2001 (incorporated by reference to Exhibit 4.6        to the Registrant's Annual Report on Form 20-F, filed with the Commission        on June 28, 2002).                      |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 4.5**           | Agreement relating to a cross-license        of essential GSM patents between Wavecom S.A. and Siemens Aktiengesellschaft,        effective as of October 31, 2001 (incorporated by reference to Exhibit 4.7        to the Registrant's Annual Report on Form 20-F, filed with the Commission        on June 28, 2002). |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 4.6**           | GSM patent non assertion agreement        with NEC Corporation, effective November 19, 2002 (incorporated        by reference to Exhibit 4.8 to the Registrant's Annual Report on Form 20-F,        filed with the Commission on May 21, 2003).                                                                              |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 4.7**           | Patent License Agreement with        Thomson Licensing S.A. and Alcatel S.A., effective January 1, 2003        (incorporated by reference to Exhibit 4.9 to the Registrant's Annual        Report on Form 20-F, filed with the Commission on May 21, 2003).                                                                  |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 4.8*+           | Agreement relating to a cross-license        of essential GSM patents between Wavecom S.A. and Nokia Corporation,        effective as of December 31, 2003.                                                                                                                                                                            |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 4.9*+           | Agreement relating to the supply        of Compact 605 with WISMO Flex products dated October 20, 2003,        between Wavecom Asia Pacific Limited and TCL Mobile Communications (HK)        Co. Ltd.                                                                                                                                 |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 8*              | List of subsidiaries of the        Registrant.                                                                                                                                                                                                                                                                                              |
|            |                                                                                                                                                                                                                                                                                                                                        |
| 10***           | Consent          of Ernst & Young        Audit.                                                                                                                                                                                                                                                                                         |

E-1

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| 12.1*** | Certification of the Chief Executive Officer.                                    |
|---------|----------------------------------------------------------------------------------|
| 12.2*** | Certification of Chief Financial Officer.                                        |
| 13.1*** | Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350. |
| 13.2*** | Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350. |
|    |                                                                             |

----

| * | Already filed on April 16, 2004, with the Annual Report on Form 20-F. |
|---|-----------------------------------------------------------------------|

|   |                                                                              |
|--------|-----------------------------------------------------------------------------------|
| **     | The Registrant has received confidential treatment of portions of this agreement. |

|   |                                                                                                                                              |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| ***    | Filed herewith.                                                                                                                                   |
|   |                                                                                                                                              |
| +      | The Registrant has requested confidential treatment of portions of this agreement, which portions have been filed separately with the Commission. |

E-2

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**SIGNATURE**

Wavecom S.A. hereby confirms that it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

|   | WAVECOM S.A. |
|--------|--------------|
|   |         |   |
|   |         |   |
|   | By:          | /s/ Chantal Bourgeat |
|   |         |  |
|   |         | Chantal Bourgeat*Chief Financial Officer* |

Date: February 28, 2005

----