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SRS Labs Delivers Solutions for the Challenges of Speaker Placement, Rear Seat Entertainment, Hands-Free Voice Clarity and Multichannel Surround Sound

The Company will be showcasing its wide range of technology solutions at this year's CES Trade Show and Exposition in Las Vegas. CES is one of the world's largest and most important shows for the consumer electronics industry, covering global markets such as home theater, portable and wireless, personal computers, and automotive applications and will be held at the Las Vegas Convention Center from Jan. 8-11, 2004. SRS Labs will provide audio enhancement demonstrations in rooms #N215 and N218, located in the North Hall of the Convention Center on an appointment basis only and will be demonstrating its Circle Surround technologies in conjunction with iBiquity Digital Corporation, the sole developer and licensor of HD Radio(TM), at the iBiquity booth #4619 in the North Hall, inside the iBiquity Hummer.

Despite being the best possible environment for an immersive, surround sound experience, cars present several formidable challenges on the road to a seamless audio experience, including speakers placed in less than ideal locations such as low in the doors and in the rear pointed up, away from listeners. Due to physical size restrictions, car speakers often have small speaker drivers physically incapable of delivering the deep rumbling bass tones consumers have come to expect from their home theater systems, and as a result have resorted to aftermarket audio systems that take up a lot of room and can be very expensive. Standard headphones used in rear-seat entertainment systems are also not able to duplicate a rich bass or a surround experience. Dialog through a cell phone or hands-free system is at times difficult to comprehend due to the car's noisy environment. SRS Labs' automotive solution suite solves these problems and delivers the best available audio enhancement without the need for manufacturers to include expensive additional equipment.

"We are excited to offer these automotive solutions and our new Circle Surround Automotive to our customers," said Lupita Ho, marketing manager for SRS Labs. "Our technologies will provide the automotive consumer with an amazing audio sound which they would expect only in their home theater setup. Leading automotive semiconductor suppliers, who will gain a powerful competitive advantage with our suite of technologies, are already slated to license Circle Surround Automotive."

SRS Labs' automotive solution suite addresses the challenges of creating a home theater-like experience in the car and delivers the best available audio enhancement without the need for manufacturers to include expensive additional equipment. Key techniques and features that can be customized by an OEM include:

Circle Surround Automotive:

        *  SRS FOCUS(R) Technology elevates the perception of a sound image
           to compensate for non-optimally placed speakers from a lower
           location such as in a car door or under the dashboard.
           FOCUS is not based on Phase and Time shifting of the original
           sound source, so the reproduced sound is very natural.  FOCUS can
           be customized for the manufacturer based on each individual car's
           speaker location, thereby allowing speakers located low in the
           doors to have different FOCUS settings than speakers in the
           dashboard.  This flexibility allows OEMs to deliver the best
           audio results for each model's configuration.

        *  SRS TruBass(R) Technology provides deep, rich bass, compensating
           for small speaker size that is often a result of physical speaker
           size manufacturing restrictions.
           TruBass is applied to LF/RF, LS/RS, and LFE speakers to produce
           the perception of improved low frequency performance up to an
           octave below the F0 of the speaker drivers.  The manufacturer can
           specify different amount of TruBass processing in LF/RF, in the
           LS/RS and LFE depending on the speaker size.  This improved bass
           can eliminate the need for a costly subwoofer or for larger size
           speakers.

        *  Smooth Steering between left and right surround channels and from
           front to rear surround channels.
           This delivers a natural and powerful surround sound experience
           for all car passengers.

        *  Up to 6.1 channels of audio from mono, stereo, matrix-encoded or
           Circle Surround-encoded material.
           The number of channels can be customized for the number of
           speakers installed in the vehicle.  For cars without a center
           speaker, Circle Surround Automotive creates an amazingly clear
           phantom center speaker.  All passengers in the car will equally
           enjoy a surround experience from any type of media.

   *  SRS TruSurround XT(TM) Headphone delivers a premium virtual surround
      sound experience from any multichannel source, transforming the
      material into breathtaking virtual surround sound over headphones.
      TruSurround XT Headphone is ideal for music, gaming and rear seat
      entertainment headphone systems.  For surround-encoded DVD movies or
      games, this solution delivers the best available virtualized surround
      sound experience.  It includes SRS TruBass bass enhancement and SRS
      Dialog Clarity for improved dialog intelligibility, two powerful and
      patented technologies that make it an invaluable solution for
      manufacturers.

   *  SRS VIP(R) (Voice Intelligibility Processor) for Hands-Free Mobile
      Phone Operation
      VIP dramatically improves a listener's ability to clearly hear and
      comprehend a caller's voice while immersed in a noisy car environment.
      VIP enhances voice clarity through real-time digital signal analysis
      and processing and improves the intelligibility and quality of
      synthesized speech from any TTS engine. It is also compatible with all
      noise reduction, in-channel noise suppression technologies, and speech
      synthesis engines.

SRS Labs' automotive entertainment and communications solutions suites are currently available for licensing by DSP platform partners and consumer electronics manufacturers worldwide. For more information on SRS technologies and to hear demonstrations online, visit www.srslabs.com . To license SRS technologies, contact Todd Goulart at 949-442-1070 or sales@srslabs.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.

Except for historical information contained in this release, statements in this release, including those by Ms. Ho in paragraph four 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 the actual growth of cellular phones which feature multimedia functions and the company's ability to capitalize on this potential opportunity with its Circle Surround technology, 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.

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

Web site: http://www.srslabs.com/

Source: SRS Labs, Inc.