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New Rio Home Stereo Component Moves Digital Audio Off of the PC and Into the Living Room

``Designed as a core component for the ultimate home audio experience, the Rio Audio Center redefines home audio capabilities,'' said Andrew Wolfe, Ph.D., chief technology officer, SONICblue. ``The Rio Audio Center delivers unmatched support for networking or downloading music to additional components and is one of the only solutions available with sound quality that meets the expectations of home audio enthusiasts.''

Engineered to the highest standards, the Rio Audio Center is already making an impression on the consumer electronics industry -- being named today as an Innovations 2002 design honoree by the Consumer Electronics Association (CEA)(1). Both CEA and SONICblue will showcase the Rio Audio Center at the International CES show in Las Vegas, Jan. 8-12, 2002.

About the Rio Advanced Digital Audio Center

As simple to use as a CD player, but as smart as a PC, the Rio Audio Center stores more than 650 CDs in an easy-to-use stereo component. Find the songs you want instantly, create unlimited play lists and fill your home with high-quality digital sound. The Rio Audio Center will even write music to a CD, transfer music to Rio portables or play music on Rio Receivers spread throughout the home. Key features of the Rio Audio Center include:

        --  Powerful 40GB hard disk drive stores more than 650 CDs(2)
            -- placing your audio collection in a single location and
            freeing your home of bulky CD collections.

        --  Easy Connection to optional Rio Receiver units allows you
            to stream your music collection throughout your home using
            existing phone lines. Connecting via its integrated 10mbps
            Home PNA connector or via a USB Ethernet adapter, the Rio
            Audio Center supports up to eight Rio Receivers at a time
            -- all with the ability to play different music
            simultaneously.

        --  High-end audio components, such as a 24-bit, 96kHz Burr
            Brown DAC, deliver unprecedented audio quality from a
            compressed home audio player.
                --  115dB channel separation
                --  101.5dB S/N ratio
                --  0.002% THD+N
                --  +0, -0.227dB frequency response (20Hz-20kHz)

        --  Integrated CD-RW drive plays, records and writes stored
            music onto standard audio CDs or MP3 data CDs (CD-R or
            CD-RW) for listening to on other devices.

        --  Large LCD display, intuitive interface, advanced search
            features and remote control make it easy to find the music
            you want instantly.

        --  High-end MP3 encoding records music at up to 320kbps for
            the highest digital sound quality, with a lower bit rate
            encoding option for downloading to portables.

        --  MP3 and WMA playback lets you listen to the most common
            file formats and is upgradeable to emerging digital
            standards through future software releases.

        --  Three convenient USB ports (front and back) allow for easy
            music transfers between the device and a Rio portable or
            PC. Ports also let you add a USB-based keyboard, joypad or
            Ethernet adapter.

        --  Unique auto-record function digitally stores CDs as you
            listen at up to 10x normal speed -- just load a disc, push
            record and the Rio Audio Center does the rest.

        --  Unlimited, customized play lists let you program music for
            personal style, taste or mood. You can also let the Rio
            Audio Center determine what you want to hear by tracking
            your listening habits.

        --  Stored Gracenote(TM) CDDB Music Recognition Service(3)
            catalogues CDs during recording with artist, album, song
            title and other information to make future searches quick
            and easy.

        --  Built-in 56 kbps modem dials out to receive software and
            CDDB updates when necessary. Alternatively, you can use
            your home's broadband connection for even speedier
            downloads.

        --  Stereo RCA and optical outputs connect the Rio Audio
            Center directly and seamlessly to your existing home
            stereo system.

Pricing and Availability

Manufacturer's suggested retail price for the Rio Advanced Digital Audio Center is $1,499.95. The Rio Audio Center is currently available for pre-order via SONICblue's website and -- for a limited time -- every Rio Audio Center sold will ship with a free Rio Receiver companion product (a $199.95 value). Initial shipments for all pre-orders will not begin until late January 2002. For more information on purchasing a Rio Audio Center, including detailed Rio Audio Center product specifications, please visit SONICblue's website (www.SONICblue.com).

About SONICblue Incorporated

SONICblue is a leader in the converging Internet, digital media, entertainment and consumer electronics markets. Working with partners that include some of the biggest brands in consumer electronics, SONICblue creates and markets products that let consumers enjoy all the benefits of a digital home and connected lifestyle. SONICblue holds significant financial assets, global marketing capabilities and a focused technology portfolio that includes Rio® digital audio players; ProGear(TM) Information Appliances; ReplayTV® personal television technology and software solutions; and Go-Video® Dual-Deck(TM) VCRs and integrated DVD+VCRs.

Except for the historical information contained herein, the matters set forth in this press release, including statements as to the expected availability, features and benefits of the Rio Advanced Digital Audio Center, are forward-looking statements within the meaning of the ``safe harbor'' provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, but not limited to, manufacturing difficulties, possible delays in the release of other products, the ability of Rio to integrate emerging memory formats with the Backpacks, and other risks detailed from time to time in the SEC reports of SONICblue Incorporated (formerly S3 Incorporated), including its quarterly report on Form 10-Q for the quarter ended Sept. 30, 2001. These forward-looking statements speak only as of the date hereof. SONICblue and Rio disclaim any intention or obligation to update or revise any forward-looking statements.

SONICblue is a trademark of SONICblue Incorporated. ReplayTV is a registered trademark of SONICblue Incorporated. Rio is a registered trademark of RioPort, Inc. and is used by SONICblue under license from RioPort Inc. All other products and brand names as they appear in this release are trademarks or registered trademarks of their respective holders. All specifications may be changed without notice.

• (1) Please see SONICblue press release from today entitled, ``SONICblue Honored with Multiple Innovations 2002 Awards.''
• (2) Approximately one hour of music per CD ripped at 128kbps MP3 format.
• (3) Music recognition technology and related data are provided by Gracenote and the Gracenote CDDB® Music Recognition ServiceSM. Gracenote is the industry standard in music recognition technology and related content delivery. For more information visit www.gracenote.com.

Contact:

     SONICblue
     Paul Crossley, 503/453-1473 (Press)
     pcrossley@sonicblue.com
     Tracy Perry, 408/588-8086 (Investor)
     tperry@sonicblue.com
        or
     The Bohle Company
     Bryce Baer, 310/785-0515 (Press)
     bryce@bohle.com