Diamond's HomeFree Phoneline Solution is Selected as the Home Networking Option for Compaq's New Presario Internet PCs

Business Wire, Jan 5, 1999

VANCOUVER, Calif.--(BUSINESS WIRE)--Jan. 5, 1999--Diamond Multimedia Systems, Inc., (Nasdaq:DIMD), a leader in multimedia solutions and emerging technologies, today announced that Compaq Computer Corporation (NYSE:CPQ) has selected Diamond's HomeFree(TM) Phoneline (also announced today as the preferred home networking solution to complement its new home network-ready Presario 5600i and Presario 5670 Internet PCs. Presario customers are encouraged to use the Diamond HomeFree Phoneline product to network any other Windows 98 or Windows 95(1) to their new home network-ready Presario. Compaq will make the Diamond HomeFree Phoneline product available through Compaq's "Built for You" custom configuration stations located in over 7,500 retail stores nationwide and through the Compaq On-Line Store at http://www.compaq.com.

6 A successful home networking solution must be easy to use and cost-effective. Compaq and Diamond Multimedia are delivering that solution using industry-standards for both networking hardware and software. Priced at approximately $50 per computer, the Diamond HomeFree Phoneline product is Home Phoneline Networking Alliance (HomePNA)-certified and uses existing home phonelines to link multiple PCs. Since the HomeFree Phoneline product does not require any new wires or cables, home networking can be as easy as plugging in a phone. Additionally, WinGate Home 3.0 software from Deerfield.com is included so that consumers can simultaneously share a single Internet connection from multiple PCs within the same home. Diamond's HomeFree Phoneline also enables consumers to share files, printers and other peripherals, and engage in networked multi-player gaming.

"We are pleased to be working with Diamond Multimedia to deliver a complete, consumer-focused home networking solution. The Diamond HomeFree Phoneline product is a perfect complement for new Presario Internet PCs and for the millions of Presarios in American homes today," said Mike Rubin, director and general manager, Presario Desktop Division, Compaq Computer Corporation. "Diamond Multimedia is a recognized leader in PC communications with a strong retail brand, and they play an integral part in these efforts. By selecting Compaq and Diamond's phoneline networking products, consumers can rest assured that they will have a complete home networking solution that is easy to set up and use and is backed by industry leaders."

"We expect demand for home connectivity products to continue to increase," said Jim Cady, vice president and general manager of Diamond Multimedia's Communications Division. "Given this trend, Compaq is well positioned as the first company to launch network-ready PCs that enable consumers to share resources via existing phonelines. With the addition of the Diamond HomeFree solution, consumers can experience fast, secure network transmissions in their homes today."

Diamond's HomeFree Phoneline product is PCI-based for easy, plug-and-play installation and delivers throughput speeds up to 1 Mbps at a range of up to 500 feet between computers (which generally covers any home up to 10,000 square feet). The HomeFree Phoneline product operates at a different frequency than a telephone, thus allowing the simultaneous operation of voice and data services on the same phoneline. As a result, consumers can enjoy the benefits of home networking without interrupting telephone calls and other phone services.

For additional information about the HomeFree Phoneline product, see today's separate press release entitled, "Diamond Multimedia Announces Addition of 'HomeFree Phoneline' to its Line of Home Networking Products for the PC." Product information is also available at http://www.diamondmm.com/homefree.> About Diamond Multimedia

Diamond Multimedia is a leader in multimedia solutions and emerging technologies for the home and business markets, providing advanced products that enable desktop computer users to create, access and experience compelling new media content from their PCs and through the Internet. Products include the Rio series of Internet audio appliances; the Stealth, Viper(R) and SpeedStar series of video accelerators; the Monster series of 3D gaming accelerators; the Fire series of professional graphics accelerators; the Micronics series of system boards; the Supra(R) series of modems; and the HomeFree line of home networking products. Diamond's common stock is traded on the Nasdaq Stock Market under the symbol DIMD, and its web site address is www.diamondmm.com.

How to Contact Diamond Multimedia

There are many ways to reach Diamond for sales support, technical assistance, driver updates and general information:

Internet Web Site: http://www.diamondmm.com Diamond Multimedia's Headquarters and Multimedia Division: 408-325-7000; Fax: 408-325-7070 Communications Division (Supra brand modems) Main Phone Number: 360-604-1400; Fax: 360-604-1401 European Division (Germany): 49-8151-266-0; (UK): 44-1189-444400; (France) 33-1-55381600 Korean Office (Seoul): 82-2-551-2700; Fax: 82-2-551-2710 Japanese Office (Tokyo): 81-3-5695-8401; Fax: 81-3-5695-8403 ASEAN Office (Singapore): 65-353-9511; Fax: 65-353-9510 Hong Kong Office: 852-2375-9023; Fax: 852-2375-9021 Australian Office (Sydney): 61-2-9460-2355; Fax 61-2-9460-2360 Swedish Office: 46-417-40060; Fax 46-417-40054 Latin America Office (Miami): 305-593-8777; Fax: 305-593-2779 Mexico Office (Guadalajara):523-110-1144; Fax:523-110-0744 Product Support (Voice), United States: 541-967-2450; Europe (Germany) 49-8151-266-330; Europe (UK) 44-1189-444444; Europe (France) 33-1-55381616; TDD/TTY Support 541-967-2451 Product Support (Fax), United States: 541-967-2401; Europe (Germany) 49-8151-266-331; Europe (UK): 44-1189-444445; (France) 33-1-55381601 Pre-sales Information: 1-800-468-5846 24-Hour Fax-On-Demand Service: 1-800-380-0030 Investor Relations: 408-325-7476; 1-888-474-3463 (U.S.and Canada) FTP site: ftp.diamondmm.com BBS: 541-967-2444 (to 33.6 Kbps); Europe (Germany) BBS at 49-8151-266333 (to 28.8 Kbps) or 49-8151-266334 (ISDN); Europe (UK) at 44-1189-444415 (to 33.6 Kbps)