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Zoran Chip Offers QSound's Enhanced Sound Capabilities to DVD Player Manufacturers

The Vaddis IV is a DVD multimedia processor used by worldwide DVD manufacturers.

Current DVD players are designed to be a total entertainment system, rather than just a playback device, through their ability to read not only DVDs, but CDs and MP3 files as well. QSound's High Definition audio technology (QHD) represents an industry first for comprehensive audio enhancements to address the three major sources used for playback in standard DVD players today.

``Zoran's programmable digital audio processors are ideal for running Dolby Digital simultaneously with QSound's suite of 3D audio enhancements on DVD players, wireless headphones, and home entertainment systems,'' said Michael L. Wood, Vice President and General Manager Home Entertainment Division at Zoran Corporation. ``Zoran's processors and SiliconSoftware(r) provide complete solutions that allow OEM manufacturers to add the latest high-quality audio technology to their products.''

For DVD audio, QHD uses QMDV(TM) (QSound Matrix Decoder/Virtualizer) to effectively create virtual 5.1 surround sound over a two-speaker system. CD audio is processed using QXpander(TM), which takes the inherent stereo sound image information and applies 3D processing proportionately to it, resulting in two-channel stereo output with a dramatically wider perceived sound field, free of the annoying acoustic artifacts typical of lower-grade processes. And MP3 audio is transformed through QXpander, QBass(TM), and QSizzle(TM) to restore both punch and brilliance to the music. The combination of these technologies presents DVD OEMs with the most comprehensive, versatile suite of audio enhancements for DVD players available.

``It's exciting to receive this endorsement from Zoran, with their prominence in the consumer electronics market,'' said David Gallagher, President, CEO, QSound Labs. ``We are looking forward to Zoran's continued use of QSound technology in their Vaddis product line.''

About QSound Labs, Inc.

Since its inception in 1988, QSound Labs, Inc. has evolved into one of the world's leading audio technology companies and an e-commerce solution provider. The Company has developed proprietary audio solutions that include virtual surround sound, positional audio and stereo enhancement for the consumer electronics, PC/multimedia, Internet and healthcare markets. The Company's cutting-edge audio technologies create rich 3D audio environments allowing consumers to enjoy stereo surround sound from two, four or 5.1 speaker systems. For more information, visit our Web site at http://www.qsound.com.

About Zoran Corporation

Zoran Corporation, based in Santa Clara, California, is a leading provider of digital solutions-on-a-chip for applications in the growing multimedia and consumer electronics markets. With almost two decades of expertise developing and delivering digital compression technologies, Zoran has pioneered high-performance processing into various audio, video, and imaging technologies. Zoran's proficiency in integration delivers major benefits for OEM customers, including greater capabilities within each product generation, reduced system costs, and shorter time to market. Zoran is a leading supplier in the rapidly expanding DVD and digital camera markets and in related digital audio and video applications. With headquarters in the U.S. and operations in Canada, China, Hong Kong, Israel, Japan, Korea and Taiwan, Zoran may be contacted on the World Wide Web at www.zoran.com or at 408-919-4111.

Zoran, Vaddis and SiliconSoftware are trademarks of Zoran Corporation. All other trademarks are the property of their respective owners.

This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, introduction of new products. Investors are cautioned that such forward-looking statements involve risk and uncertainties, which could cause actual results, performance or achievements of the Company, or industry results to differ materially from those reflected in the forward-looking statements. Such risks and uncertainties include, but are not limited to, risks associated with consumer acceptance of the Company's products, the Company's ability to carry out its business strategy and marketing plans, including availability of sufficient resources for the Company to do so timely and cost effectively, dependence on intellectual property, rapid technological change and competition, and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. Forward-looking statements are based on the current expectations, projections and opinions of the Company's management, and the Company undertakes no obligation to publicly release the results of any revisions to such forward-looking statements which may be made, for example to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Contact:

     QSound Labs, Inc.
     Paula Murray, 954/796-8798
     Fax: 954/796-9312
     Email: paula.murray@qsound.com
     Website: www.qsound.com
                  OR
     QSound Labs, Inc.
     Jody Alexander, 403/291-2492
     Fax: 403/250-1521
     Email: Jody.alexander@qsound.com