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S3 partners with major music labels on SDMI-compliant digital rights management and secure audio format support in third generation Rio digital audio players

The new Rios can be seen today in the Cirrus Logic booth at the South by Southwest conference in Austin, TX. Information on specific functions and features of the new Rios will be available when the products ship later this spring.

``We have been working to develop players that best represent the consumer and provide a pleasing experience wherever people enjoy music,'' said Mike Reed, director of marketing for S3's Diamond Multimedia Communications Division. ``A significant part of that experience comes from working with music labels to make it easier for people to get more of the music they want on a portable player.''

Content Support

The new third generation Rio players already are breaking new ground with overwhelming music industry support. The new Rio players not only support SDMI, digital rights management from InterTrust Technologies and Microsoft's Windows Media, but also the MP3 and AAC audio codecs. Consumers who purchase a new Rio can expect to see music from several major music labels bundled in the box, on the player and on the Web.

``Without boxing consumers into proprietary audio formats, the third generation Rio players provide the appropriate platform for secure music releases, building the right formula for delivering more music to more consumers,'' added Reed.

BMG Entertainment -- ``The third generation Rio digital audio player is an important step toward the development of a robust commercial market for electronically distributed music,'' said Kevin Conroy, senior vice president, Worldwide Marketing and New Technology, BMG Entertainment. ``By embracing multiple formats, S3/Diamond's new portable device will both provide consumers with convenience and flexibility and protect the rights of artists.''

EMI Music -- ``The new range of Rio players are impressive for their cool design combined with their ability to support SDMI and secure content,'' said Jeremy Silver, vice president new media, EMI Recorded Music Worldwide. ``It's great to see a well-designed product, with user-friendly interfaces which helps to ensure artists' music can be protected from piracy and be easily available for fans to enjoy.''

Sony Music -- ``We are very pleased that Diamond is bringing to market SDMI-compliant devices that support the secure distribution of music,'' said Al Smith, senior vice president, Sony Music Entertainment. ``We look forward to working with them to make our artists' music available for these new portable players.''

Universal Music Group -- ``The third generation of Rio players provide a great platform for fans to enjoy Universal's wide range of music,'' said Heather Myers, executive vice president and general manager of Global e, Universal Music Group. ``We are looking forward to supporting the new Rio players and working with Diamond to make our content available to their customers.''

About Diamond Multimedia

A division of S3 Incorporated, Diamond has been the leader in communications, digital music players and home networking since its introduction of the HomeFree product line in January 1999, and the introduction of the Rio player in November 1998.

About S3 Incorporated

Building on the technology, distribution and brand strengths of its Communications, Multimedia and Professional Graphics divisions, S3 is committed to delivering targeted products for the Personal Computer and Consumer/Internet Appliance markets. Rounding out its PC silicon offerings, S3's recent acquisition of Diamond Multimedia adds consumer brands such as the Viper(TM) and Stealth(TM) series of graphics accelerators, Rio series of Internet audio appliances, the Supra(TM) series of modems, and the HomeFree(TM) line of home networking products.

Except for historical information contained herein, the matters set forth in this press release are forward-looking statements that are subject to risk and uncertainties, including the impact of competitive products and pricing and of alternative technological advances, and other risks detailed from time to time in S3's SEC reports, including its quarterly report on Form 10-Q for the quarter ended September 30, 1999. S3 is a registered trademark of S3 Incorporated. The S3 corporate logo, Diamond Multimedia, Viper, Stealth, Rio, Supra and HomeFree are trademarks of S3 Incorporated. Other marks referenced herein are the property of their respective owners.

Note: A Photo is available at URL:

http://www.businesswire.com/cgi-bin/photo.cgi?pw.011300/bb2

Contact:

     Porter Novelli Convergence Group
     Nate Schwalbach, 206/770-7005
     Nate.schwalbach@pnicg.com
      or
     Wayne Barringer, 206-770-7002
     Wayne.barringer@pnicg.com