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SRS WOW(TM) Technology Is Standard Feature in Windows Media Player 9 Series; Circle Surround(R) and TruSurround(R) XT Software Plug-ins Become Available

As separate plug-ins that can be purchased directly from SRS Labs' ecommerce store ( www.srslabs.com/windows_media.asp ), the CS and TruSurround XT software products will help further demonstrate the benefits of Windows Media. The new software products available for sale include both CS encoding tools for content creators and software upgrade plug-in products for all computer users. The company anticipates that beta versions of these new software products will be available in the next two weeks.

"We're pleased to continue working with Microsoft to include our SRS WOW technology into the new Windows Media Player 9 Series," said Thomas C.K. Yuen, chairman, president and chief executive officer of SRS Labs. "This relationship has provided tremendous consumer exposure for our WOW technology, and we are now working with Microsoft to open up new branding opportunities for our Circle Surround and TruSurround technologies. The increasing popularity of surround sound and widespread availability of CS-encoded material through our new plug-in should help to increase demand of CS receivers from consumer electronics manufacturers such as Kenwood, Marantz, Theta Digital and Accuphase."

The Windows Media Player, now the leading digital media player used among U.S. households according to the 2002 MediaMetrix Soft Usage Reports, includes a direct link to SRS Labs which has attracted over 20 million visitors since July of 2000. The Windows Media Player is now the leading digital media player used among U.S. households, according to the 2002 MediaMetrix Soft Usage Reports. There are more than 450 million distributed copies of Windows Media Player worldwide.

"Windows Media 9 Series provides a dramatically improved playback experience and unmatched audio and video quality," said Jonathan Usher, director of the Windows Digital Media Division at Microsoft. "SRS Labs is a pioneer in the field of audio enhancement, and we are pleased to work with SRS Labs to bring advanced audio technologies such as SRS WOW and two new plug-ins to users of Windows Media Player 9 Series."

Content creators wishing to deliver high quality, 5.1 multichannel audio at low bandwidths (down to 44 Kbps) will enjoy the CS encoder plug-in tool. The Circle Surround II decoder plug-in creates up to 6.1 channels of high quality surround sound from mono, typical stereo sources (such as MP3 files), and other matrix surround encoded material. Optimal performance is achieved with CS encoded source material. SRS Labs' patented TruSurround XT technology has become the established standard for virtual surround sound. PC owners with two speakers will enjoy the best performance of all multichannel audio from Windows Media 9 Series content with the TruSurround XT plug-in.

About Circle Surround Encoding/Decoding

The Circle Surround encoder enables content creation into the CS format for storage and delivery of full-range 5.1 surround sound via the Internet, traditional broadcast and other media formats (e.g. VHS, CD, DVD) using existing stereo carriers. CS delivers home theater audio performance at as low as 128kbs with no artifacts. Suggested applications include music, live concerts, movie trailers and video-on-demand. CS-encoded audio is backward compatible with stereo, Dolby® Pro Logic, Pro Logic II, SRS Labs' CS 5.1 and CS II surround decoders. For the ultimate in surround sound playback, CS II decoders are recommended since they also provide dialog clarity, bass enrichment and dual-band steering.

Circle Surround II is the most powerful and advanced matrix surround decoder available on the market today. It delivers up to 6.1 channels of full-bandwidth audio with incredible rear surround separation from mono, stereo, Dolby Surround and CS encoded material. This backward compatibility provides a thrilling cinema-like audio experience from all content -- CDs, video games, VHS movies or television programming. Two advanced audio features from SRS Labs that further make CS II the compelling choice for matrix surround decoding are SRS Dialog Clarity(TM) and TruBass®. SRS Dialog Clarity enables the listener to more easily and clearly discern actors' dialog from the rest of the soundtrack. TruBass technology creates the sensation of deep, rich bass over the front channels and subwoofer through monitoring the original program for low frequency audio.

About TruSurround XT

TruSurround XT is the most advanced technology for delivering virtual surround sound over standard, two-speaker playback systems. It is based upon its namesake, the patented TruSurround® technology, which is the established standard for virtual surround sound. While solving the problem of 5.1 multichannel audio playback (from sources such as DVD, digital satellite, etc.) over two speakers or headphones, TruSurround XT also provides the unique SRS features of Dialog Clarity, WOW and TruBass. TruSurround XT has recently become available in top software DVD players from CyberLink, InterVideo and Orion Studios. TruSurround has been featured in over 10 million consumer hardware products globally including products made by Funai Electric, Hughes Network Systems, Mitsubishi Electric Corporation, Sony, Thomson multimedia, Toshiba Corporation and Pioneer. To hear an online demonstration of TruSurround XT, visit http://www.srslabs.com/demonstrations.asp#TSXT .

About SRS WOW

SRS WOW is an award-winning, patented, stereo playback enhancement technology that improves audio dynamics and bass performance of stereo music played over small speakers or headphones. WOW processes a stereo signal to provide significant improvements in dynamics and bass performance of audio, especially when it has been digitally compressed in formats such as MP3, WMA and audio CD. It also provides clear three-dimensional stereo sound over speakers or headphones. WOW improves the dynamics, reduces the "tinny" sound and enhances bass performance of speakers and headphones. As a result, manufacturers of small audio devices, mobile and personal/portable products can dramatically improve their product's audio performance without enlarging the speaker size.

About SRS Labs, Inc.

SRS Labs, Inc. ( www.srslabs.com ) and its subsidiaries provide advanced technology solutions for high growth consumer markets, including home theater, DVD, portable audio, wireless devices, game consoles, automotive, broadcast, Internet and personal computer software. SRS Labs, the parent company, develops the core audio and voice technologies and licenses these patented technologies to over 200 well-known manufacturers and semiconductor companies, including Sony, RCA, Philips, Kenwood, Mitsubishi, Hitachi, Microsoft, and Pioneer. ValenceTech, Ltd., ( www.valencetech.com ) SRS Labs' Hong Kong-based subsidiary, is a leading fabless application specific integrated circuit (ASIC) design and manufacturing company providing analog and digital ASIC solutions to the world's leading manufacturers of consumer electronics, gaming, telecommunications and computer products. SRS Labs' subsidiary, SRSWOWcast Technologies, ( www.srstechnologies.com ) focuses on the Internet and broadcast markets by developing and licensing customized hardware and software products incorporating SRS Labs' patented technologies. The information on the above-referenced websites is not incorporated by reference into this press release.

Except for historical information contained in this release, statements in this release, including those of Mr. Yuen in paragraph three are forward-looking statements and projections (which include statements concerning plans and objectives of management for future operations) that are based on management's belief, as well as assumptions made by, and information currently available to, management. While the Company believes that its expectations are based upon reasonable assumptions, there can be no assurances that the Company's goals and strategy will be realized. Numerous factors (including risks and uncertainties) may affect the Company's actual results and may cause results to differ materially from those expressed in forward-looking statements made by or on behalf of the Company. Some of these factors include the general market conditions concerning semiconductor business, the impact of competitive products and pricing, the timely development and release of technologies by the Company, general business and economic conditions, especially in Asia, and other factors detailed in the Company's Form 10-K and other periodic reports filed with the SEC. SRS Labs specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise. Other product or service names mentioned herein are the trademarks of their respective owners.

For further information, please contact investors, Tami Yanito, +1-949-442-1070, ext. 3093, tami@srslabs.com, or media, Jennifer Drescher, +1-949-442-1070, ext. 5110, jenniferd@srslabs.com, both of SRS Labs, Inc.

Source: SRS Labs, Inc.