Press Release



QSound Labs and Philips Enter Into Joint Development Agreement to Deliver Innovative Digital Audio Solutions For PC and CE Market



CALGARY, CANADA and SUNNYVALE, CALIFORNIA - April 30, 2002 - QSound Labs, Inc. (NASDAQ: QSND), a leading developer of audio, e-commerce and multimedia software products, and Royal Philips Electronics of the Netherlands (AEX: PHI, NYSE: PHG), one of the world’s largest electronics companies, today announced they have entered into a joint development agreement to produce innovative digital audio solutions targeted for the multi-channel soundcard market and other consumer electronics products.


Under the new agreement, Philips will combine its proven sound expertise, which has earned it a leading position in the soundcard and overall CE markets, with QSound’s unique audio enhancement technologies and award-winning audio-processing algorithms. As a result, Philips will be able to speed time to market of best-of-breed digital audio products for both the PC and CE space, ultimately delivering advanced surround-sound capabilities designed to enhance the user’s audio experience. Specifically, QSound offers unmatched technology that will, in turn, allow Philips to transform ordinary stereo music, games and movies to true surround-sound mediums—helping further differentiate Philips’ products from the competition.

According to Matt Medeiros, president and CEO of Philips’ Components division, “Today’s announcement reinforces our commitment to investing in core digital technologies by collaborating with leading technology companies, together with leveraging our internal strengths in the audio space, to deliver industry’s most compelling solutions. Specifically, this agreement is part of our strategy to further entrench our position in the multimedia audio space, where QSound is a long-standing player with a demonstrated history of innovation.”

"We’re pleased to partner with Philips in this undertaking," said David Gallagher, president and CEO of QSound. "With Internet users in the United States alone estimated to reach 165 million by the end of this year, people are using their computers as multimedia centers more than ever before. Coupling our expertise in audio enhancements with Philips’ technology and consumer electronics expertise will enable consumers to take full advantage of Internet audio, in ways they could never have imagined."

Illustrating the companies’ successful relationship to date, Philips has already leveraged QSound’s technology in three of its sound cards: Rhythmic Edge™, Seismic Edge™ and Acoustic Edge™. The Acoustic Edge soundcard has since gained acclaim for its immersive 5.1 channel output and has won a number of industry accolades, including CNET Editors' Choice Award, Gamers Depot Sound Card of the Year Award, and Neoseeker Editors’ Choice Award.

Financial details surrounding the joint development agreement were not disclosed.


About Philips:
Royal Philips Electronics of the Netherlands is one of the world’s biggest electronics companies and Europe’s largest, with sales of $28.8 billion (EUR 32.3 billion) in 2001. It is a global leader in color television sets, lighting, electric shavers, medical diagnostic imaging and patient monitoring, and one-chip TV products. Its 186,000 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, and medical systems. Philips is quoted on the NYSE (symbol: PHG), London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at

ATTN Broadcasters: Philips b-roll (via beta copy, fiber transmission and satellite feed), is available 24/7 from PR NEWSWIRE (212-375-0021).


This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, QSound Labs’ business relationship with Philips and the development and commercial introduction of new, improved products. 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 loss of relationships with companies that do business with the Company, successful product development, introduction and acceptance , the Company’s ability to carry out its business strategy and marketing plans, including availability of sufficient resources to do so timely and cost effectively, dependence on intellectual property, rapid technological change, competition, general economic and business conditions, continued growth of the Internet 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.





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