SONICblue Adds Major Retailer for Rio Players; Rio 600 Players Now Available in Over 1,300 Wal-Mart Stores Nationwide

Business Wire, June 12, 2001

Business Editors/High-Tech Writers

VANCOUVER, Wash.--(BUSINESS WIRE)--June 12, 2001

Rio(R), a division of SONICblue(TM) Incorporated (Nasdaq:SBLU), today announced that Wal-Mart Stores, Inc. (NYSE:WMT) will carry Rio 600 digital audio players in over 1,300 Wal-Mart locations nationwide. An easy-to-use and expandable player, the Rio 600 has been selected as a core product offering in Wal-Mart's newly created Digital Audio Center.

"Rio is a widely recognized brand and a key component in our Digital Audio Centers," said Phil Fielding, senior audio buyer for Wal-Mart. "In addition to the Rio 600, we are working closely with Rio to bring other products into the mix in the future."

"Our joint effort with Wal-Mart in the rollout of the Digital Audio Center is a significant step forward in two areas," said Tony Storino, vice president of Merchandising for Rio. "One, it expands our presence in the market by more than 1,300 new retail outlets and, two, it shows that mainstream consumers and retailers are further embracing the digital audio format."

About Rio 600

Building on Rio's revolutionary 300 and 500 handheld players, the Rio 600 is an easy-to-use and expandable digital audio player designed to allow people to listen to music in the way they want. The Rio 600 comes with either 1 or 2 hours of music storage capacity and features an ergonomic shape, large display, support for MP3 and WMA, as well as other emerging digital music formats. The Rio 600 also offers the industry's only Backpack expansion technology, allowing users to further expand the music storage of their Rio 600 by simply purchasing and slipping on a new Rio backpack.

About Rio

Rio, a division of SONICblue, is a pioneer and acknowledged leader in digital audio. Focused on delivering a family of digital audio products designed for various lifestyles, Rio is dedicated to engineering superior portable, home and car digital audio products for consumers.

About SONICblue Incorporated (www.SONICblue.com)

SONICblue is a leader in the converging Internet, digital media and consumer device markets. Working with partners that include some of the biggest brands in consumer electronics, SONICblue creates and markets products that let consumers enjoy all the benefits of a digital home and connected lifestyle. SONICblue holds significant financial assets, global marketing capabilities and a focused technology portfolio, that includes Rio digital audio players, HomeFree(TM) home networking solutions, Diamond(TM) Internet access products and frontpath(TM) Information Appliances.

Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, but not limited to, manufacturing difficulties, possible delays in the release of other products, the ability of Rio to integrate emerging memory formats with the Backpacks, the ability of Wal-Mart to sell the Rio 600 and any Rio products that may be available in the future, and other risks detailed from time to time in the SEC reports of SONICblue Incorporated (formerly S3 Incorporated), including its quarterly report on Form 10-Q for the quarter ended March 31, 2001. These forward-looking statements speak only as of the date hereof. SONICblue and Rio disclaim any intention or obligation to update or revise any forward-looking statements. SONICblue, HomeFree, Diamond and frontpath are trademarks of SONICblue. Rio is a registered trademark of RioPort, Inc. and is used by SONICblue under license from RioPort, Inc. Other marks referenced herein are the property of their respective owners.