Recoton Corporation and Lucent Digital Radio Form Alliance to Develop In-Band On Channel -IBOC- Digital Audio Broadcast -DAB- Receivers

Business Wire, August 31, 1999

LAKE MARY, Fla.--(BUSINESS WIRE)--Aug. 31, 1999--

Recoton Corporation (NASDAQ National Market: RCOT), a leading supplier under the Jensen(R) brand name for car and home audio products, and Lucent Digital Radio, Inc., a subsidiary of Lucent Technologies (NYSE:LU), have formed a collaboration alliance for the development and testing of In-Band On Channel (IBOC) Digital Audio Broadcast (DAB) receivers for consumers. The two companies will begin test and development efforts immediately at both Recoton and Lucent facilities and field-testing will follow shortly. Recoton has previously announced that it is creating and developing products for CD Radio (R), a leading Satellite Digital Audio Radio System (SDARS) company.

The Lucent Digital Radio IBOC system is designed as an end-to-end solution that will enable broadcast stations to seamlessly convert to an all-digital AM or FM broadcast scheme. Lucent Digital Radio recently conducted tests of its IBOC FM system on National Public Radio (NPR) member station WBJB-FM. These tests were the first time that an IBOC system successfully passed a hybrid (both analog and digital) signal over a radio station's antenna and transmitter without affecting the host analog signal.

Robert L. Borchardt, President and CEO of Recoton Corporation in making the announcement, stated, "The radio listening experience is about to undergo a momentous transformation from analog to digital, and we believe that our work with Lucent Digital Radio will help move the industry into the digital era." He further commented, "Very few companies have the resources to undertake such an endeavor, and we know that both Recoton and Lucent's commitment to excellence offers us both a remarkable opportunity for our customers and ultimately the consumer."

"The consumer retail channel has considerable confidence in Recoton and the Jensen brand name, and we believe that their efforts in helping to develop IBOC receivers will help prepare the industry for this critical transition from analog to digital radio," said Suren Pai, President of Lucent Digital Radio. "We are very glad to have the opportunity to work with a leader in the consumer audio field, and look forward to developing high-quality, reliable IBOC receivers that consumers will want to buy."

According to the Consumer Electronics Manufacturers Association (CEMA), there are more than 600 million radios in the United States, or more than six per household. Radio is consumed by more than 235 million Americans on an average weekly basis of 22 hours. The digital radio era will enable new forms of content services and devices to deliver greater quality and quantity of programming to more listeners than ever before.

Lucent Digital Radio's IBOC DAB system is an enhancement to current analog AM and FM radio broadcasting systems. It will provide greatly enhanced sound quality for AM radio, CD-like quality for FM radio, as well as interference-free reception and innovative new data services.

Lucent Digital Radio draws on several patented Bell Labs digital audio and channel coding techniques that provide robust digital signal delivery in an impaired broadcast channel, including Lucent's Perceptual Audio Coder(TM) (PAC(TM)) technology, which delivers CD-like quality audio at 96 Kilobits per second; Unequal Error Protection, which prioritizes information based on its impact to audio quality; and Multi-Streaming, which provides for a more robust signal in an impaired channel.

The IBOC approach will allow broadcasters to introduce digital audio programming to listeners on their current dial positions using existing transmitters and antennas. IBOC DAB is both backward- and forward-compatible: current AM/FM receivers will still be able to receive the existing analog signals in the new system. When a station elects to turn off the analog signal in the future, IBOC DAB-compatible receivers will operate with the remaining all-digital signal.

Lucent Digital Radio, Inc., a venture owned by Lucent Technologies and Pequot Capital Management, Inc., is a company developing IBOC DAB technology for AM and FM broadcasting worldwide. For more information, visit the company's Web site at www.lucent.com/ldr. Lucent Digital Radio's IBOC system will be resistant to multi-path and other forms of interference that impair current analog transmissions which Recoton intends to utilize in their design and development of several satellite digital audio receiving devices, including a plug and play adapter, which will work through the cassette bay of existing car stereos, as well as a second adapter which works with 95% of existing car stereos. In addition, Recoton's mobile audio division will develop and market Jensen brand aftermarket 3-band (AM/FM/Digital) car stereo receivers.

This press release may contain forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. Such statements speak only as of the date made. Please refer to the Company's current Form 10-K and other SEC filings.