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Philips Introduces New QSound Enhanced Product at CeBIT

Soft Soundcard Bundled With New Digital Speakers

Calgary, Alberta - March 17, 2004 -- QSound Labs, Inc, (NASDAQ: QSND), a leading developer of audio, voice and e-commerce software solutions, today announced the introduction of a new QSound enhanced multimedia bundle from Philips. The bundle includes Philips Sound Agent 2 software with new digital audio speakers, the DX220. Philips is demonstrating the DX220 at CeBIT, in Hanover, March 17-24, 2004.

Philips Sound Agent 2 is based on a modular sound engine developed by QSound Labs, and incorporates algorithms from both Philips and QSound. The DX220 USB stereo speakers are exceptionally convenient, simply plugging into, and drawing power from, a USB 2.0 port. This multimedia kit will be available in Europe in April.

"We are proud of our joint development efforts with Philips which produced the Sound Agent 2,” stated David Gallagher, President of QSound Labs. “The DX220 bundle is a natural extension for this software which has previously been incorporated into Philips soundcard product line, the latest of which is the award winning Aurilium, an external USB soundcard.”

About QSound Labs, Inc.:
Since its inception in 1988, QSound Labs, Inc. has evolved into one of the world's leading audio technology companies and an e-commerce solution provider. The Company has developed proprietary audio solutions that include virtual surround sound, positional audio and stereo enhancement for the consumer electronics, PC/multimedia, Internet and healthcare markets. The Company's cutting-edge audio technologies create rich 3D audio environments allowing consumers to enjoy stereo surround sound from two, four or 5.1 speaker systems. To hear 3D audio demos and learn more about QSound, visit our web site at http://www.qsound.com

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