Press Release



Mitsubishi Electronics Launches Industry's First Sound Processor Integration of QSound Labs' QSurroundT 5.1 Technology



New Sound Processor is Continuation of Technology Alliance Formed Last Year to Provide the Highest-Quality Audio Products, Cost-Effectively



Calgary, Alberta - June 29, 2000 -- QSound Labs, Inc. (NASDAQ: QSND) and the Electronic Device Group of Mitsubishi Electronics America, Inc., today announced Mitsubishi's M65857FP sound processor, the semiconductor industry's first chip to incorporate QSound Labs' QSurround™ 5.1 technology. Integrated into Mitsubishi's digital delay core as an analog circuit, the QSurround 5.1 technology generates a surround sound effect of up to 5.1 speakers from any mono or stereo input signal. Mitsubishi's M65857P sound processor, the newest chip to come out of the technology alliance formed by QSound Labs and Mitsubishi last year, provides a cost-effective, high-quality surround sound solution for home theater, audio-visual receiver, television, MP3 digital player, mini-stereo system, car audio and any other mono or stereo consumer audio application. Samples will be available in July 2000.

"Combining QSound's QSurround 5.1 technology with Mitsubishi's digital delay technology effectively provides a realistic 5.1-speaker surround sound effect for a vast array of consumer audio products which traditionally have been only stereo or two-channel output," said George Riehm, Senior Marketing Manager for Consumer Products at Mitsubishi Electronics America, Inc. "With this new sound processor, customers can apply the benefits of this technology to a wide range of consumer product applications very cost-effectively."

"We are very pleased with the introduction of yet another QSound-enhanced product by Mitsubishi," said David Gallagher, President and CEO, QSound Labs. "By continuing to work together we believe we will be able to provide customers the widest range of high-quality audio solutions available in today's marketplace."

QSurround is QSound's family of 3D audio processes that were designed to meet the challenge of all multi-channel audio delivery formats. By creating "virtual speakers", QSurround reproduces the full surround sound effect of multi-channel audio with only two physical speakers, and also includes enhancements for every system configuration up to a full 5.1 channel set up. Specifically, QSurround 5.1 is QSound's stereo-to-surround synthesis algorithm. Applied in the consumer environment, it creates a stunning surround effect with distinctly different outputs for the full-range of speaker configurations: two, three, four, five, or 5.1. With true stereo material, the acoustic image is effectively wrapped around the listener, retaining correct and distinctly relative placement. For mono content, a surround image is synthesized with remarkable realism.

About Mitsubishi Electric & Mitsubishi Electronics America:
Ranked among the top-10 worldwide semiconductor suppliers, Mitsubishi Electric Corporation is a leading manufacturer of low-end to high-end sound processors for numerous applications, such as home and car audio; Compact Disc player; videocassette recorder; middle-class and high-end monitor; and middle-class, high-end and LCD TV applications. The company also makes other application-specific standard products (ASSPs) for motor driver, TV, VCR, fax, disk drive, telephone, communications and audio/video system applications, as well as standard linear and digital/analog interface ICs. Mitsubishi's ASSPs are manufactured with extensive feature sets that meet specific application requirements and use a standard-cell design approach to reduce chip size, costs and product development time. The company implements its ASSPs as standard ICs for multiple customers and maps them to singular or multiple applications. Mitsubishi Electric offers an extensive range of semiconductor-based products and markets them to the North American marketplace through the Electronic Device Group of Mitsubishi Electronics America, Inc. Additional information on the Mitsubishi Electric Semiconductor Group is available at

This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, the anticipated introduction of new products and projected shipment dates of products and future financial results. Investors are cautioned that such forward-looking statements involve risk and uncertainties, which could cause actual results, performance or achievements of the Company, or industry results to differ materially from those reflected in the forward-looking statements. Such risks and uncertainties include, but are not limited to, risks associated with the commercialization of the Company's technologies, dependence on the performance of third parties who have licensed the Company's technologies, dependence on intellectual property, uncertainties relating to product development and commercial introduction, rapid technological change and competition, manufacturing uncertainties and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission. Forward-looking statements are based on the current expectations, projections and opinions of the Company's management, and the Company undertakes no obligation to publicly release the results of any revisions to such forward-looking statements which may be made, for example to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.  QSound and QSound logo are registered trademarks and QSurround is a trademark of QSound Labs, Inc. Mitsubishi and the Mitsubishi logo are registered trademarks of Mitsubishi Electric Corporation in the U.S.A., Japan and other countries.





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