Eclipse Launches Mobile CD, HDD and DVD Receivers With SRS Circle Surround Automotive(TM)

First Products to Ship Under New License Agreement Include Three Aftermarket Products for the U.S. Market

LAS VEGAS, Jan. 6 -- SRS Labs, Inc. , a leading provider of innovative audio, voice and semiconductor technology solutions, announced today that its powerful Circle Surround(R) decoding technology is included in several new lines of CD, HDD and DVD automotive receivers from Eclipse that will be available in the first half of 2005. Eclipse(TM) is the brand for aftermarket products from Fujitsu Ten, which became a licensee of SRS Labs in 2004. Eclipse is implementing SRS Circle Surround Automotive(TM) ("CS Auto"), which is the only surround decoding solution that includes post-processing techniques that enhance the surround experience in the automotive environment. Circle Surround Automotive as implemented by Eclipse is designed for a 5.1 audio experience over a four- speaker system. Demonstrations of Circle Surround Automotive will be held in SRS Labs' booth #6516 and Eclipse's booth #1413 from Jan. 6-9, 2005 in the North Hall of the International Consumer Electronics Show ("CES"), one of the CE industry's largest trade events.

The first navigation product from Eclipse with CS Auto is the AVN5495, a second-generation unit from their highly acclaimed navigation series product line with touch-panel display, music jukebox, and CD/DVD playback. "Circle Surround is cutting edge technology for the 12 V market and Eclipse is thrilled to be one of the first brands to have it," said Michael West, Eclipse's marketing director. Eclipse is also launching two standalone CD/MS receivers with MP3 and WMA decoding, models CD8455 and CD8445.

"Since most automobiles come standard with four or more speakers, it is an ideal environment to incorporate our advanced Circle Surround Automotive technology," said Todd Goulart, director of U.S. sales for SRS Labs. "Through our partnerships with Eclipse, we are now fulfilling the promise to deliver a home theater quality experience to all consumers in any automobile."

Circle Surround Automotive creates a thrilling in-vehicle surround sound experience from any audio material, including mono or stereo music and movie content, compressed music, traditional radio broadcasts, satellite radio, and digital broadcasts from HD Radio(TM), over four or more speakers. It delivers a good surround experience to every seat and is the only multichannel decoding solution with enhancement techniques that can be optimized for the varying automotive environments. CS Auto also creates a phantom center image for those vehicles that do not yet support a dedicated center speaker. The enhancements and features offered in CS Auto set a new benchmark to not only deliver surround sound in the vehicle, but also to improve the quality of the audio experience.

The CS Automotive post processing techniques offered in the Eclipse products that can be activated by the consumer to tailor the audio experience in their automobile include:

   SRS FOCUS(R) Technology
   FOCUS 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.  It is not based on phase and time shifting of
   the original sound source, so the reproduced sound is very natural.  The
   Eclipse units include a user variable control from 0 to 10 that
   determines the amount of stereo image elevation that is applied to the
   audio signal, thereby determining the perceived height of the sound field
   relative to the listener and the placement of the speakers.  Since door
   speakers are usually located low in the doors, they will require more
   FOCUS processing than speakers in the dashboard.  FOCUS can be applied to
   the front and/or rear speakers and has the added benefit of providing
   definition and clarity to the high end.

   SRS TruBass(R) Technology
   TruBass is a patented psychoacoustic technology that produces the
   perception of improved low frequency performance up to an octave below
   the F0 of the actual speaker drivers.  The Eclipse units include two
   TruBass settings.  The first is a user variable processing control that
   determines the amount of additional bass signal that is mixed into the
   final output.  The second is a speaker size setting from small, medium to
   large that allows a consumer to indicate the size of the installed
   speakers.  TruBass can be applied to the front and/or rear speakers or
   subwoofer if one is present.

SRS Labs' automotive technology solutions suites are currently available for license by automakers and manufacturers of both factory installed equipment as well as aftermarket electronics. Companies currently featuring SRS technologies in their products include Eclipse, Honda, Johnson Controls, Kenwood, Panasonic, Toyota, and Volkswagen. For more information on SRS technologies and to hear demonstrations online, visit www.srslabs.com. To license SRS automotive technologies, contact Todd Goulart at (949) 442-1070 ext. 5036 or toddg@srslabs.com.

About Circle Surround(R)

Circle Surround ("CS") is a patented and highly versatile multichannel audio encoding and decoding technology capable of supporting a wide range of surround sound creation and playback applications. CS hardware and software encoders can encode up to 6.1 channels of discrete audio for distribution over existing two-channel carriers such as broadcast television, cable and satellite transmission, streaming media over the Internet, CDs and VHS tapes. The next generation of Circle Surround is Circle Surround II ("CS II"), a powerful and versatile multichannel decoder capable of delivering up to 6.1 channels of audio from any mono, stereo, matrix-encoded, or Circle Surround-encoded material.

Circle Surround encoding has made inroads to many of Hollywood's most influential creative talent and professional broadcasters. In September 2004, SRS Labs formed a strategic alliance with Coming Home Studios ("CHS"), one of LA's hottest new full service television and DVD production companies, to create and distribute live concert DVDs in SRS Circle Surround. CHS has produced many of today's top DVDs including Dave Matthews Band -- The Central Park Concert, Gloria Estefan -- Live & Unwrapped, Rush -- Live in Rio, and many others. Recent DVDs encoded in Circle Surround from this exciting new partnership include: Matchbox Twenty's SHOW -- A Night In The Life Of Matchbox Twenty, Boz Scaggs' Greatest Hits Live and Godsmack -- Changes. Lava Records, EMI Hong Kong and Arbors Jazz have also distributed music CDs. One of the most powerful features of the technology for music CDs is that it is 100 percent compatible with all playback environments, from headphone to one-speaker mono to two-speaker stereo or multi-speaker surround sound. One mix now satisfies every playback system.

The CS format is the optimum surround solution for television and radio because it enables any TV or radio broadcaster currently delivering their content in stereo to now deliver up to 6.1 surround to its listeners or viewers with no change to the distribution or broadcast infrastructure. Top television broadcasters in the U.S. and abroad, who have adopted Circle Surround technology include ABC, CBS, NBC, ESPN, ESPN 2, ESPN HD, FOX, FX, TNT, PBS for dozens of programs including the 55th Annual Prime Time Emmy Awards, X Games, NFL and NBA broadcasts. Circle Surround is also quickly being adopted as the surround encoding technology of choice for radio broadcasting. For the U.S. market, it is the only surround format approved by iBiquity Digital for its HD Radio technology, which is the only FCC-approved system that provides digital broadcasting within the existing AM and FM spectrum and also supports analog broadcasts to legacy receivers. Abroad, both TOKYO FM in Japan and Guangdong Radio in China, which have audiences in the hundreds of millions, regularly broadcast material in Circle Surround.

To date, Circle Surround decoding has been incorporated by leading hardware and software manufacturers including: Kenwood, Marantz, Motorola, Theta Digital, Accuphase, M-Audio, Orion Studios and Smart Devices. A wide range of analog and digital implementation options for CS and CS II are available from the SRS Labs' family of platform partners including AKM, Analog Devices, ASP Microelectronics, Cirrus Logic, Philips Semiconductor, STMicroelectronics and Texas Instruments. CS II features patented post-processing techniques to enhance the surround sound experience, including SRS Dialog Clarity(TM), which improves the intelligibility and clarity of center channel information such as dialog, and SRS TruBass(R), which uses patented psychoacoustic techniques to deliver deep, rich bass from any playback system, including those with or without a subwoofer.

Eclipse, a division of Fujitsu Ten, delivers sound quality in mobile electronics comparable to that of home systems in the areas of Tuners/CD Players, Amplifiers, Speakers, DVD visual media and Navigation. Eclipse sells products through a select group of retail partners. Additional information is available at www.eclipse-web.com.

About SRS Labs Inc.

SRS Labs is 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, flat panel displays, DVD players, mobile phones, car audio systems, headphones and notebook and desktop 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.

   SRS Investor Contact:         SRS Media Contact:
   Tami Yanito                   Jennifer Drescher
   (949) 442-1070 x 3093         (949) 442-1070 x 5010
   tami@srslabs.com              jenniferd@srslabs.com