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New Rio Digital Audio Receiver streams stored music from a PC hard drive to any room in the home via phone lines

The receiver works with existing phone lines to distribute the digital music collections beyond the home computer. The new Rio Receiver is being demonstrated today for the first time at the RealNetworks® (Nasdaq:RNWK) annual conference - Real Conference 2000 in San Jose - by CEO Rob Glaser.

To date, consumers have only had access to portable players as a way to hear their digital music beyond the PC. Now, consumers can play digital music selections in any room where a Rio Receiver can be placed. With multiple receivers, various digital music selections can be sent to different locations simultaneously. Individuals can choose what music they want streamed to each Rio Receiver by scrolling and searching their stored collection via controls on the unit, or by using the receiver's remote control.

``We want our customers to have the freedom to stream their music to any place they want,'' said Len Jordan, senior vice president, Consumer Appliances, RealNetworks, Inc. ``S3's new Rio Receiver is a great example of how easy it is to distribute and listen to digital music from the RealJukebox playlists throughout the home.''

Out of the box, the Rio Receiver works with the industry-leading RealJukebox(TM) software. It supports various digital music formats, such as MP3 and Microsoft's® Windows Media(TM) and can be upgraded to support formats developed in the future. The unit also works with other jukebox software such as Rio Audio Manager and comes with a built-in amplifier to ensure high-quality digital audio sound.

``We're continuing to make good on our promise to take digital music beyond the PC,'' said Mike Reed, director of marketing for S3's Rio Audio Group. ``The Rio Receiver provides consumers more flexibility to enjoy digital music in the living room, den or any other room, with no additional home computers or wiring.''

Rio Digital Audio Receiver Features

The Rio Digital Audio Receiver is the first in a new line of Rio Audio products for the home and includes the following features:

Easy Set-Up -- The Rio Receiver connects to existing home speakers and phone lines and plugs into any electrical outlet. No extra wiring is required, and the system's networking card simply snaps into place.

Remote Control -- In a matter of seconds, consumers can scroll and search through their entire stored music collection by title, artist, album or genre.

Information Display -- Information about the song, album, artist and total playing time is all displayed on a large back-lit screen whenever the receiver is on. The display can also be customized to match consumers' personal preferences.

Fast Downloads -- The Rio Receiver utilizes a 10-megabit connection to the PC, a bandwidth that allows consumers to distribute large digital music files quickly from their PC to the receiver.

Pricing and Availability

The Rio Digital Audio Receiver will be available later this summer for an estimated retail price of $299.95 at North American retail outlets. That price includes the receiver, an audio connector for the PC (internal PCI card), two phone cords and an RCA cable. Consumers can also purchase a Rio Receiver without the Rio Audio Connector for an estimated retail price of $249.95.

To watch Rob Glaser's live demonstration of the new Rio Digital Audio Receiver via Web cast, tune in to www.real.com today at 9:30 a.m. PDT.

About S3 Incorporated

Following its acquisition of Diamond Multimedia and the transfer of its graphics chip assets to a joint venture company, S3 has been re-launched as a digital media company focused on creating products and partnerships that help build the digital home. Combining significant financial assets with a strong technology portfolio, that includes the Rio family of digital audio players and the HomeFree series of home networking solutions, S3 is uniquely positioned to capitalize on high growth opportunities in the rapidly converging Internet and consumer device markets.

Except for historical information contained herein, the matters set forth in this press release are forward-looking statements that are subject to risk and uncertainties, including the impact of competitive products and pricing and of alternative technological advances, and other risks detailed from time to time in S3's SEC reports, including its quarterly report on Form 10-Q for the quarter ended March 31, 2000. S3 is a registered trademark of S3 Incorporated. The S3 corporate logo, Diamond Multimedia and HomeFree are trademarks of S3 Incorporated. Rio is a trademark of RioPort.com, Inc. and is used by S3 under license from RioPort.com, Inc. Other marks referenced herein are the property of their respective owners.

RealNetworks and RealJukebox are trademarks or registered trademarks of RealNetworks, Inc.

Note: A Photo is available at URL:

http://www.businesswire.com/cgi-bin/photo.cgi?pw.052400/bb7

Contact:

     Porter Novelli Convergence Group
     Kelley McGrath, 206/727-2880
     kelley.mcgrath@pnicg.com