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New Licensing Agreement Between SRS and NEC Marks Expansion of SRS WOW(TM) Licensing Into Two of the Top Three Mobile Phone Manufacturers in Japan

According to industry researcher The Gartner Group, mobile phone sales in Japan in the first quarter of 2003 were up 33.7 percent year over year. NEC, which has a strong line-up of phones for leading Japanese mobile carrier NTT DoCoMo, Inc., held the top spot in the Japanese market for the ninth straight quarter. NEC said, "We are pleased to initiate this relationship with SRS Labs and feature their unique audio solutions on our latest mobile phones."

Ted Franceschi, executive vice president and general manager of SRS Labs said, "NEC is recognized as an innovator, leading the industry in creating state-of-the-art phones with the latest advancements in technology. The powerful combination of their industry-leading handset designs, our award-winning audio and voice enhancement technologies and advanced chip solutions such as Texas Instruments' OMAP digital signal processors (DSPs), gives service providers and consumers around the world the best quality audio experience possible for mobile phones."

"From improving the audio quality of midi ring tones, digital music and game sounds in the latest multimedia-enabled wireless handsets to improving voice intelligibility and bass tone quality of small speakers in noisy mobile environments, SRS Labs brings value to leading manufacturers selecting TI's powerful, market-proven and battery friendly OMAP platform," said Paul Werp, worldwide director of marketing for TI's OMAP platform. "TI's OMAP Developer Network continues to deliver the leading applications that are important differentiators for device manufacturers."

The mobile phone is rapidly becoming a true convergent product, combining voice communications and entertainment features, including digital cameras, digital music players, streaming video, gaming capabilities and polyphonic ring tones. SRS Labs' audio and voice enhancement technologies help handset makers overcome the audio challenges of the physical handset design.

SRS WOW is the ideal technology solution for these audio-enabled mobile phones because it provides a dramatically wide, three-dimensional sound image with deep, rich bass over small speakers and headphones. It utilizes patented psychoacoustic techniques to deliver a spacious, natural and immersive 3D audio listening experience. To compensate for the poor bass performance inherent in small speakers and headphone drivers, WOW also includes a patented bass enhancement technology that overcomes the physical limitations of the small speakers or headphones and creates a deep, rich low-frequency performance. SRS Dialog Clarity delivers significant speech clarity, improvements to the vocal range of any reproduced sound and also provides crispness and clarity to vocals found in digital music.

SRS Labs' technologies are rapidly becoming a "must-have" feature by the world's leading portable audio and mobile phone manufacturers. Sharp Corporation, the third largest mobile phone manufacturer in Japan, as well as Mitsubishi Corporation, both use SRS technologies to deliver the highest quality audio experience in their mobile phones. More than 300 million WOW-equipped hardware or software products have been shipped or downloaded, including mobile phones from Sharp, digital audio players from Samsung, Olympus, eDigital, I-River and I-Bead, Microsoft's Windows® Media Player series software products, car CD receivers from Kenwood, as well as televisions from Sony, Hitachi, Toshiba and Sharp. For a demonstration of the stunning difference WOW makes to stereo audio, visit the SRS Labs website at http://www.srslabs.com/Demonstrations.asp . For information on licensing SRS technology, contact sales@srslabs.com.

About NEC Corporation

NEC Corporation (Nasdaq: NIPNY; FTSE: 6701q.l) is one of the world's leading providers of Internet, broadband network and enterprise business solutions dedicated to meeting the specialized needs of its diverse and global base of customers. Ranked as one of the world's top patent-producing companies, NEC delivers tailored solutions in the key fields of computer, networking and electron devices, by integrating its technical strengths in IT and Networks, and by providing advanced semiconductor solutions through NEC Electronics Corporation. The NEC Group employs more than 140,000 people worldwide and had net sales of approximately $40 billion in the fiscal year ended March 2003. For additional information, please visit the NEC home page at: http://www.nec.com .

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 Labs' 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 creation, production and broadcast of content featuring SRS Labs' technologies. SRS Labs' wholly owned subsidiary, ValenceTech, is a Hong Kong-based semiconductor company that designs and sells 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 aforementioned website is not incorporated by reference into this press release.

    (C) Copyright 2003, SRS Labs, Inc. All Rights Reserved.  SRS, WOW, SRS
        Dialog Clarity and the SRS symbol are trademarks of SRS Labs, Inc.
        All other brand names mentioned are trademarks or registered
        trademarks of their respective holders.
       *FOMA is a registered trademark of NTT DoCoMo, Inc. in Japan.
       *FOMA service is only available to subscribers in Japan.

Except for historical information contained in this release, statements in this release are forward-looking statements and projections (which include certain 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 actual growth of cellular phones which feature multimedia functions and the company's ability to capitalize on this potential opportunity with its WOW and Dialog Clarity technologies, 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: Investor, 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.