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Leading Digital Audio Enhancement, WOW Technology, Provides Ultimate in Audio Playback for Next Generation Mobile Phones

In this new phone, SRS WOW has been optimized for headphones, providing an immersive 3D stereo listening experience combined with deep rich bass, achieved through SRS Labs' patented TruBass® technology. From the music player screen, users may select from two different TruBass settings, a 3D audio setting, or may activate the full WOW technology for the ultimate music listening experience. The new Sharp cellular phone incorporates functions such as a music player, voice recorder, personal calendar, digital still and movie camera, email, web access and more. The suggested retail price of the standard J-SH52 package is 60,000 YEN or approximately $484 USD.

The number of cellular phone subscribers in Japan reached approximately 72 million at the end of September 2002. SRS Labs' regional sales office in Japan enables the company to quickly penetrate this important regional market through its understanding of the culture and its specific market needs. "The value, power and performance of our technologies and brand in the mobile phone market has become an attractive feature for Japan's mobile handset makers this year," said Hank Kato, director of Japan operations for SRS Labs. "Our ability to deliver audio solutions designed specifically for the mobile handset market for both audio and voice features found in handsets has attracted the leading manufacturers and wireless service providers, such as Sharp and J-PHONE, to license our technologies to ensure superior audio for these multimedia-featured phones."

"This new model from Sharp is yet another step forward in our penetration of the 400 million units-a-year global cellular phone market with specialized audio and voice enhancements," said Thomas C.K. Yuen, chairman, CEO and president of SRS Labs. "Our ability to deliver superb, market leading audio and voice technologies that solve unique design problems found in these extremely small handset designs sets us apart from other audio technology companies. We believe that Sharp has helped us ignite a significant trend for the licensing of our technology in this product market." Yuen continued, "As we expand into this market with licensees such as Sharp, we continue to developing new technologies that deliver the best quality audio for tomorrow's handset features."

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, especially when the audio has been digitally compressed in formats such as MP3, WMA and audio CD. It provides clear three-dimensional stereo sound, reduces the "tinny" sound experienced in smaller speakers and enhances the bass performance of any speakers and headphones even in the presence of a subwoofer. 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 Sharp

Sharp Corporation is a worldwide developer of innovative products and core technologies that play a key role in shaping the future of electronics. As a leader in liquid crystal displays (LCDs) and digital technologies, Sharp offers one of the broadest and most advanced lines of consumer electronics, information products and electronic components, while also creating new network businesses. Sharp Corporation currently employs about 57,500 people in the world and recorded consolidated annual sales of over 1,803.7 billion yen for the fiscal year ended March 31, 2002. For more information, please visit Sharp's Web site at http://sharp-world.com/index.html .

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, Panasonic, 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.

(C)2002 SRS Labs, Inc. SRS, Sound Retrieval System, SRS Headphone, and the SRS Logo are registered trademarks of SRS Labs, Inc. in the United States and selected foreign countries. "J-PHONE" is a registered trademark of J-PHONE Co., Ltd. Other product or service names mentioned herein are the trademarks of their respective owners.

Except for historical information contained in this release, statements in this release, including the statement by Mr. Yuen in paragraph four regarding licensing trends in the cell phone market 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 SRS Labs' continued relationship with Sharp Cellular and its inclusion in future projects, the actual progression of the cell phone market and Sharp's continued status as a leader in that market, the acceptance of new SRS Labs' products and technologies, 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 the economic impact of recent or future terrorist actions and other risks detailed in the Company's Form 10-K and other periodic reports filed with the SEC.

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, or Japan Contact, Hank Kato, +011-81-45-890-1833, hkato@srslabs.com, www.srslabs.jp, all of SRS Labs, Inc.

Source: SRS Labs, Inc.