Press Release



QUALCOMM and QSound Collaborate to Deliver Advanced Audio to Wireless With microQ 3D Sound Solutions



Rich 3D Audio Quality Enabled for New Multimedia Wireless Devices



CALGARY - June 23, 2004 - QSound Labs, Inc. (NASDAQ: QSND), a leading developer of audio and voice software solutions, and QUALCOMM Incorporated (NASDAQ: QCOM), pioneer and world leader of Code Division Multiple Access (CDMA) digital wireless technology, today announced that QUALCOMM has licensed QSound's Q3D™ and QXpander® technologies and will integrate these audio enhancers into select QUALCOMM Mobile Station Modem™ (MSM™) chipsets. Q3D and QXpander, part of QSound's microQ family of audio components, can create a 3D audio effect with stereo headsets or just two speakers by expanding audio signals to create a much richer wireless audio experience. The software release incorporating QSound's QXpander technology will be available in the fourth quarter of calendar 2004, beginning with QUALCOMM's MSM6550™ chipset solution.

"We are extremely pleased to partner with QUALCOMM on our 3D enhancement and 3D positional solutions," said David Gallagher, President of QSound Labs Inc. "QUALCOMM's MSM chipsets provide a powerful platform which will allow QSound to leverage its cutting-edge technologies and proven expertise in rich, 3D audio solutions."

"QUALCOMM's collaboration with QSound will enhance the quality of streaming audio, music playback, ringtones and online gaming services for a superior listening and enhanced multimedia experience," said Luis Pineda, vice president of marketing and product management for QUALCOMM CDMA Technologies. "Now, wireless consumers can experience cinema-like, surround-sound effects on their cell phones - objects in 3D games will seem to whiz by them and music services will have rich, professional equipment-quality sound."

The Q3D audio positional technology brings a surround-sound experience to the wireless device by controlling the position of virtual sound sources in the space around the listener's head. The QXpander technology simulates a wider sound-scape, enhancing wireless stereo audio quality by creating the sensation that the speakers are larger and farther apart than they actually are.

Integrating Q3D and QXpander into QUALCOMM's chipset solutions enable wireless devices to provide rich 3D audio sound and superior audio quality, including emulating a live concert experience or an audio gaming reality that lets the consumer feel the sound effects. QUALCOMM's licensing agreement also includes QSound's psychoacoustic audio enhancement algorithms to analyze audio content and restore high and low frequencies; QSizzleTM enhances treble response and QRumbleTM enhances bass response.

QSound's technologies use simplified tuning algorithms that allow handset manufacturers to easily tune the QXpander or Q3D algorithms to their particular speaker configuration. Integrating QSound's fully tested audio technologies into QUALCOMM's market-proven chipsets enables a faster time-to-market, cost-effective 3D audio solution for handset manufacturers. This solution also enhances the audio components of QUALCOMM's LaunchpadTM suite of multimedia technologies, including the playback of ringtones, music, video, gaming sound effects and digital audio.

QUALCOMM's MSM6550 chipset solution enables power-efficient, high-resolution multimedia wireless devices that deliver larger screens and impressive multimedia while optimizing power consumption. The MSM6550 chipset is designed to support the advanced feature set of QUALCOMM's Launchpad suite, encompassing advanced multimedia, connectivity, position location, user interface and removable storage capabilities.

QUALCOMM's chipsets include access to QUALCOMM's BREW® solution. The BREW system enables the development and monetization of advanced applications and content, allowing operators and OEMs to differentiate their products and services and increase revenues. QUALCOMM's chipsets are also compatible with the Java runtime environment; J2METM can be built entirely on the chipset as an extension to the BREW solution.


QUALCOMM Incorporated ( is a leader in developing and delivering innovative digital wireless communications products and services based on the Company's CDMA digital technology. Headquartered in San Diego, Calif., QUALCOMM is included in the S&P 500 Index and is a 2003 FORTUNE 500® company traded on The NASDAQ Stock Market® under the ticker symbol QCOM.


About QSound Labs, Inc.:
Since its inception in 1988, QSound Labs, Inc. has established itself as one of the world's leading audio technology companies. The company has developed proprietary audio solutions that include virtual surround sound, positional audio and stereo enhancement for the consumer electronics, PC/multimedia, Internet and healthcare markets. QSound Labs' cutting-edge audio technologies create rich 3D audio environments allowing consumers to enjoy stereo surround sound from two, four or 5.1 speaker systems, as well as portable headphones. The company's customer and partner roster includes Toshiba, Philips, Sanyo, Sharp, Aiwa, and MiTAC, among others. To hear 3D audio demos and learn more about QSound, visit our web site at

This release contains forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 concerning, among other things, introduction of the availability new microQ-enabled products that support Intel Wireless MMX technology. Investors are cautioned that such forward-looking statements involve risk and uncertainties, which could cause actual results, performance or achievements of QSound, 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 acceptance of microQ technology by manufacturers and consumers, continued growth of the mobile electronics market, dependence on intellectual property, rapid technological change, competition, general economic and business conditions, and other risks detailed from time to time in QSound's periodic reports filed with the Securities and Exchange Commission. Forward-looking statements are based on the current expectations, projections and opinions of QSound's management, and QSound 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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