Dolby and ARM Enter AAC Patent License Agreement for High Quality Music Playback in Portable Internet Audio Devices

Dolby and ARM Enter AAC Patent License
Agreement for High Quality Music Playback in
Portable Internet Audio Devices

Store Less, Hear More in new ARM® core-based
portable music playback devices

San Francisco, CA, May 22, 2000-Dolby Laboratories announced that ARM (LSE:ARM; Nasdaq:ARMHY), a leading provider of embedded microprocessor Intellectual Property (IP), has entered into an agreement allowing it to develop an optimized version of Advanced Audio Coding (AAC) technology for the ARM® architecture. The ARM-optimized AAC implementation, available now through ARM, enables hardware manufacturers to create ARM Powered^TM portable music playback devices capable of decoding high-quality music delivered via the Internet.

AAC is the latest audio coder standardized by the International Organization for Standardization (ISO) as part of the MPEG specification. Compared to MPEG Layer-3, popularly known as MP3, AAC provides higher quality music while requiring approximately 30% less storage and/or bandwidth.

"ARM has a successful track record of enabling consumer digital electronics, and to build on that, we've been developing a product portfolio that will enable us to take a leading position in the emerging digital audio market," said Dave Walsh, manager of ARM's application software group. "By offering a highly optimized software implementation of MPEG-AAC for the ARM architecture, system designers have access to a total solution for developing high-quality SDMI-compliant digital audio devices."

Several audio compression formats are vying for the prize of the successor technology to MP3. In order for the record industry to start encoding and releasing their musical assets in downloadable formats, the industry needs to be confident about two things: (1) that security mechanisms are in place so that their valuable content is not pirated, and (2) that high-quality playback systems are available to the worldwide mass market on a variety of platforms. Of the competing technologies, only AAC is an international standard, only AAC was cooperatively developed by the world's leading audio compression experts, and only AAC is being licensed by Dolby Laboratories.

"It is very significant that ARM has chosen to provide AAC technology," said Ramzi Haidamus, Dolby Laboratories' Technical/Business Strategist. "The availability of a high-quality AAC decoder implementation on an ARM processor core will help many OEMs get products to market this year. We will continue to work closely with ARM and its customers to make a solid business out of the amazing grass-roots phenomenon of downloadable music."

For more information about AAC, please visit the AAC website, www.aac-audio.com, or send email to aacla@dolby.com.

About AAC
AAC is high-quality audio coding technology and the solution of choice for many broadcast and electronic music distribution applications. AAC is compatible with all digital rights management, encryption, and watermarking solutions available today. In independent tests, the coding efficiency of AAC proved to be superior to MP3, providing higher-quality audio reproduction at lower bit rates. AAC provides up to 48 channels of audio, sample rates of up to 96 kHz, and can achieve ITU-R broadcast quality at 320 kb/s for a 5.1-channel audio program. Developed and standardized as an ISO/IEC specification by four industry leaders (AT&T, Dolby Laboratories, Fraunhofer IIS, and Sony Corporation), AAC is supported by a growing number of hardware and software manufacturers.

About ARM
ARM (www.arm.com) a leading intellectual property (IP) provider, licenses high-performance, low-cost, power-efficient RISC processors, peripherals, and system-chip designs to leading international electronics companies. ARM also provides comprehensive support required in developing a complete system. ARM's microprocessor cores are rapidly becoming the volume RISC standard in such markets as portable communications, hand-held computing, multimedia digital consumer and embedded solutions.

About AT&T
AT&T Corp (www.att.com) is among the world's premier voice, video and data communications companies, serving more than 80 million customers, including consumers, businesses and government. With annual revenues of more than $62 billion and 148,000 employees, AT&T provides services to customers worldwide. The company runs the world's largest, most sophisticated communications network and has one of the largest digital wireless networks in North America. Its services are backed by the research and development capabilities of AT&T Labs, which is working to create the information services and communications network of tomorrow. AT&T Labs is a leader in the development of technologies and standards for audio (http://www.research.att.com/history/soundinnovation.html), speech, video and image compression; electronic commerce and digital copyright management; search and directory services; speech processing and coding of all sorts; network architecture, design, engineering and operations; and other areas critical to the advancement of new broadband communications and Internet offerings.

About Dolby Laboratories
Dolby Laboratories (www.dolby.com) is the developer of signal processing systems used worldwide in applications that include motion-picture sound, consumer entertainment products and media, broadcasting, and music recording. Based in San Francisco with European headquarters in England, the privately held company also has offices in New York, Los Angeles, Shanghai, and Tokyo.

About Fraunhofer IIS
Fraunhofer IIS (www.iis.fhg.de/amm) is the leading research laboratory in the area of audio coding. For more than ten years, Fraunhofer IIS has actively driven forward international standardization of several audio compression algorithms including MPEG Layer-3 and AAC. Besides devising advanced algorithms, Fraunhofer IIS engineers focus on the effective implementation of state-of-the-art audio and video coding schemes on PCs and digital signal processors (DSPs). Fraunhofer IIS is active in international efforts focussing on methods for intellectual property management and protection, including MPEG-4 and SDMI.

About Sony
Sony Corporation (www.sony.com) is a leading manufacturer of audio, video, communications, and information technology products for the consumer and professional markets. Its music, pictures, and computer entertainment operations make Sony one of the most comprehensive companies in the world. Sony recorded consolidated annual sales of over $56 billion for the fiscal year ended March 31, 1999.

Media Contacts:
Jim Arnold, Dolby Laboratories, Director of Public Relations, 415-645-5116 jja@dolby.com
Lynne Daily-Hentemann, Shandwick International, 310-203-0550 ldaily@shandwick.com