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Samsung yepp(TM) Digital Audio Players Featuring SRS WOW(TM) Audio Technology Are First Products Under New Agreement

The small cylindrical design of the yepp portable player looks much like a tube of lipstick. In addition to the featured WOW audio technology, the player includes an FM radio, USB socket to connect to a personal computer and real-time encoding function that enables users to record both radio and audio from an external device connected via a mini jack. A single AAA battery provides approximately 15 hours of playback. The YP-55 began shipping in South Korea on April 20 and is available in two versions. The 128MB model (YP-55H) retails for $172 USD and the 256MB version (YP-55V) retails at $205 USD. In a recent article, Samsung said it expects sales of the player will contribute to around 60 percent of the estimated 200,000 players it aims to sell in South Korea in 2003. Shipments to the United States and other overseas markets will begin in the next few months.

"Samsung is a benchmark for quality in Korea and I am very proud that our technology and brand have demonstrated its value and become standard features in Samsung's new digital audio players," commented Steven Kim, SRS Labs' sales manager for Korea. "We have worked closely with Samsung over the past few years to develop SRS technology solutions for their products. Through our efforts and close collaboration we re-engaged Samsung to use SRS Labs technologies, which has led to significant new opportunities. The initial result of this agreement is Samsung's adoption of our WOW technology in this exciting new product."

Digital audio player is a term used to describe a device that plays back compressed digital audio files in any one of several formats, including MP3, Windows Media Audio (WMA) and Advanced Audio Coding (AAC), and are available in portable, car and home form factors. Over the past few years, most digital audio players primarily played MP3 files and at a hefty price tag of over $200 for only 30 minutes worth of songs. Today's players take full advantage of recent technology innovations, such as longer battery life, more storage and more audio functionality. These tangible user benefits and dropping prices have resulted in a resurgence of the digital audio player market. According to InStat/MDR, the worldwide market for portable digital music player unit shipments (including solid state and revolving media products) will be robust over the next five years, growing from about 7.2 million in 2002 to almost 30 million in 2006.

"Our SRS WOW technology is the ideal solution to provide CD quality audio for the compressed audio file format on portable digital players," said Ted Franceschi, executive vice president and general manager for SRS Labs. "Our WOW audio enhancement unlocks the highs and lows that tend to get muddy when digital audio is compressed and the power of the WOW brand provides an assurance to consumers around the world that they are enjoying the highest quality audio experience."

About WOW

SRS WOW is an award-winning, patented, playback enhancement technology that improves audio dynamics and bass performance of any mono or stereo audio. It provides a stunning improvement when used with smaller speakers or headphones that are not capable of achieving a high fidelity experience, especially when the audio has been digitally compressed into formats, such as MP3 and WMA. Hardware and software products that feature WOW include mobile phones from Sharp, Microsoft's Windows® Media Player series software products, car CD receivers from Kenwood, as well as televisions from Sony and Sharp. To date, over 300 million hardware or software products have been shipped or downloaded that include the powerful WOW audio feature.

WOW provides digital audio player manufacturers with the ability to instantly improve their product's overall sound quality. It delivers an incredible headphone listening experience to any music genre providing the perception of deep, rich bass and an amazing 3D listening experience. WOW has been designed with product manufacturers in mind and includes many customizable settings that can be adjusted and optimized to for a particular product application or can be extended to the user interface or product controls to allow the consumer to set their preferences. Features include available sampling rates from 8 to 44 kHz, headphone or speaker selector, choice of eight speaker size settings based on the low frequency cut-off of the drivers, choice of mono or stereo input modes and more.

About SRS Labs Inc.

Celebrating a decade in audio technology innovation, SRS Labs has become a recognized leader in the advancement of audio and voice technology. The company works with the world's top manufacturers to provide a richer entertainment experience through patented sound techniques. SRS technologies can be heard through products ranging from televisions, DVD players, cell phones, car audio systems and computers. The company also offers hardware and software tools to professionals and consumers for the production and broadcast of content featuring SRS technologies. SRS Labs' wholly owned subsidiary, ValenceTech, is located in Hong Kong and provides custom ASICs and standard ICs to leading manufacturers worldwide. Based in Santa Ana, Calif., the company also has licensing representation in Hong Kong, Japan, Europe, and Korea. For more information about SRS Labs, Inc. please visit www.srslabs.com . 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 in paragraph three and five 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 Samsung and its inclusion in future projects, the general market conditions concerning the semiconductor business, 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 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.

For further information please contact: investors, Tami Yanito, ext. 3093, tami@srslabs.com , or media, Jennifer Drescher, ext. 5010, jenniferd@srslabs.com , both of SRS Labs, Inc., +1-949-442-1070.