(COMTEX) B: Organization Profile: Spatializer Audio Laboratories Inc.
B: Organization Profile: Spatializer Audio Laboratories Inc. (OTC Bulletin
Board: SPAZ) Spatializer Dominates DVD Market With 'Virtual Surround Sound'
Software Spatializer technology sets 'de facto' virtual surround sound standard
for digital audio industry applications through technology development and by
focusing on strategic relationships in CY2000. Spatializer is now positioned to
penetrate multiple digital audio markets in CY2001, while maintaining
profitability.
SANTA CLARA, Calif., Jan 8, 2001 /PRNewswire via COMTEX/ -- Spatializer Audio
Laboratories Inc. (OTC Bulletin Board: SPAZ) began its ninth year as a public
company with expectations of growing profitability and declarations that it
achieved its goal of securing a leading market share of the DVD player segment.
The company says that it is now poised to expand its success into multiple
digital audio markets. Spatializer is a leading developer, licenser, and
marketer of next-generation audio processing technologies for the consumer
electronics, computing and entertainment industries.
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The company's advanced audio technology is incorporated into consumer
electronics audio, video and DVD products manufactured by global brand leaders
including Toshiba, JVC, Panasonic, Hitachi, Samsung, Acer, Sharp, Sanyo, LG,
Emerson, Zenith and Proton, in PC multimedia systems and peripherals from Apple,
Dell, Gateway, Hewlett Packard, Sony, Fujitsu, Seiko-Epson, NEC, Micron and
Labtec, in silicon from Matsushita, New Japan Radio Corporation, ESS, Zoran,
Motorola, C-Cube, VM Labs, and Acer Laboratories Inc, and in software compatible
with MP3 players such as WinAmp and embedded with RISC cores from MIPS
Technologies.
"As we enter the first year of the New Millennium, we're pleased to report that
we've met our operating objectives while laying the foundation to penetrate
multiple, fast developing markets such as portable MP3 players, Internet
appliances, digital televisions, A/V receivers and set top boxes," says CEO
Henry R. Mandell, who is also Spatializer's chairman of the board. "We believe
that we enjoy the dominant market share for the DVD player segment. Our
aggressive marketing efforts continue to forge new inroads into other audio
product sectors as well. Our revenues and profits throughout CY2000 have been in
line with our expectations."
Mandell says that he expects Spatializer software to eventually dominate other
audio industry segments just as the company now dominates the DVD segment.
"We're very proud of the engineering team that we've put together," says
Mandell. "We're confident that the innovations and new products that emerge from
their research and development will give us the competitive edge that we need to
expand our leadership with virtual audio software and to fully capitalize on the
digital audio revolution. The groundwork has been completed. The relationships
to penetrate multiple new markets have been developed. The infrastructure that
we need is in place. Now we're focused on growing this company to reach its
optimum potential."
Studio Surround Sound Possible In Small Audio Products
Stephen W. Desper, a renowned Hollywood recording engineer, filed his first US
patent for a device that he called the Spatializer in 1982. While working in a
recording studio with groups like the Beach Boys, Desper also experimented in
his lab to find new ways to improve audio presentations outside the studio. It
was Desper's dream to find a way to project sound through speakers equal to the
sound that he heard in the studio. To accomplish this, he needed to eliminate
the spectral transmission losses then seemingly inevitable in even the most
sophisticated of recording environments. Spatializer proved to be just such a
device. It created a rich immersive sound field that seemed to envelop the
listener without introducing any spectral or tonal distortion.
Realizing the potential of his invention, Desper further researched and refined
the Spatializer. With the help of friends, he formed a company called Desper
Products Inc. in 1986. Desper produced a prototype system in 1990 and began a
series of successful trials on several animated productions with Warner Bros.
Studios. In 1992, Spatializer was declared "ready" and the first Spatializer
circuit was developed. Immediately following this, the company went public under
the name Spatializer Audio Laboratories Inc. In October of that year,
Spatializer Audio Labs' first product, the PRO Spatializer(TM), was released at
the Audio Engineering Society conference in San Francisco. There it received
global acclaim. PRO Spatializer(TM) enjoyed immediate success, becoming
entrenched in many recording studios.
By 1993, Spatializer Audio Laboratories Inc. expanded Spatializer's applications
to the mass market. In 1993, Matsushita Electronics Corporation (MEC) of Japan
agreed to develop and distribute the first commercial Spatializer IC under
license from Desper Products. Royalties received from this IC became the
cornerstone that supported Spatializer Audio Labs future growth and development.
Buoyed by an array of products based on the initial Spatializer technology and
supported by an impressive list of licensees, Spatializer Audio Labs began
trading on the Nasdaq in 1995. This provided the capital that enabled
Spatializer to develop a new line of digital based virtual surround sound
products, including Spatializer N-2-2(TM), as well as additional analog circuit
designs. This, in turn, led to new distribution licenses being signed with
semiconductor companies such as ESS and C-Cube Technologies. Spatializer
technology became incorporated into numerous consumer products from PC speakers
and sound-cards to TV's and VCR's. Spatializer was well on the way to
establishing an industry standard with its virtual surround sound software.
In mid-1996 Spatializer acquired its second subsidiary, MultiDisc Technologies
Inc. MultiDisc created some compelling technology that promised to revolutionize
the world of fast-access data storage. However, by 1998 the full fiscal impact
of the required development costs became apparent and operations at MultiDisc
were suspended.
Spatializer Today
Spatializer Audio Laboratories Inc. is now very different company. In September
1998, a new management team was appointed and a new corporate strategy
developed. All efforts were re-focused on the development of Spatializer's core
competency -- audio enhancement software. Spatializer is once again an
audio-only company dedicated to pushing the outer limits of the audio
experience.
Spatializer's Web site has been revamped to better inform and serve its
strategic partners and their clientele. The company plans to expand its impact
on the Internet. It's now possible to download Spatializer's unique software
from the company's online store, which will be expanded in the coming months.
Soon, audiophiles will find easy-to-use plug-ins that enable them to upgrade the
sound from their MP3 players and PCs. Links to all of Spatializer's strategic
partners make it easy to review and order systems that have been enhanced by
Spatializer technology. Prospective customers may sample the Spatializer
experience by downloading online audio demos.
Spatializer is exploiting opportunities presented by the increased capacity in
DSP processing power and the advent of digital audio into the home. The company
concentrates on developing new and improved algorithms to run its software. The
original Spatializer technology is now marketed as Spatializer 3D-Stereo to
differentiate it from the newer digital technology, such as Spatializer N-2-2,
and Spatializer Digital FX. New licensees continue to incorporate Spatializer's
technology. The most notable of these are Apple Computer, Acer, Toshiba, LG
Electronics, Zenith, and Samsung. MIPS Technologies, Hitachi, and 4Front
Technologies joined them in CY2000. Spatializer's sales and research staff is
now located in Santa Clara, CA, with Spatializer's Asian operations centralized
out of its regional office in Tokyo, Japan. In addition, Spatializer recently
announced the appointment of Internix, a leading publicly traded electronics rep
firm, to expand Spatializer's sales and marketing presence in Japan. (see
contacts for more information). Spatializer also retains representative offices
in Hong Kong, Taiwan and Korea. All these offices provide the company with a
truly global presence.
After being appointed as Spatializer CEO in February 2000, Henry Mandell defined
the firm's past accomplishments thusly:
"We set out to aggressively exploit our existing technology to generate
immediate new revenue streams. Technology licensing deals with Apple Computer
Inc., which incorporated our suite of technologies across their hardware
platforms; with Acer Labs Inc.; and several DVD player design wins with Samsung,
LG Electronics, Zenith, Hitachi and Marantz, among others, were the result of
these efforts. Indeed, based on our success in the DVD player market, we believe
that Spatializer N-2-2(TM) is positioned as the leading virtual surround sound
technology in that market with an estimated 40 percent market share, based on
industry reported sales.
"We streamlined our overhead structure. In doing so, we were able to restore
profitability and generate a 21 percent return on sales. At the same time, we
transitioned from flat fee licenses, which limited revenue growth, to a running
royalty business model that provides the company with upside in the fast growing
DVD player and digital audio markets. We laid the ground work to capitalize on
emerging market opportunities, by launching StreamFX(TM) -- our streaming audio
enhancement product for the Internet, Vi.B.E(TM) -- our virtual bass enhancement
technology, and by aligning ourselves with VM Labs and their revolutionary
NUON(TM) digital signal processor, targeted at the computer gaming market.
Lastly, we put the company's liquidity crisis behind us by obtaining financing,
with minimal dilution to the stockholders, to provide resources to vigorously
pursue growth."
Mandell explained to Spatializer stockholders last year that the company would
have to make certain investments in people, research and infrastructure in order
to grow business. He said that he would be willing to sacrifice a quarter or two
of lower profitability in order to ensure the proper foundation for future
growth. "Now I'm pleased to report that we have laid this foundation. I see less
need going forward for increased staffing to support our future initiatives,
based on the new investments we have now made. This will enable us to further
leverage future revenue growth into increased profitability."
The Spatializer DigitalFX(TM) series is positioned to be a springboard to
capturing a substantial share of new business opportunities being generated by
the digital audio revolution. These include MP3 players, set-top boxes, Internet
appliances and PDAs that are projected to be produced over the next few years.
On the research side, Spatializer significantly expanded its engineering team
with talented individuals who are passionate about audio.
CY2000 Milestones:
Mar. 21 -- Spatializer establishes four objectives to accomplish over the next
12 months of CY2000:
-- First, to establish Spatializer N-2-2(TM) as the "de facto" standard for
virtual surround sound not only within the global DVD player market, but also
within a wide range of other audio applications, including set top boxes,
Internet appliances and gaming;
-- Second, to penetrate the market for audio enhancement in portable music
devices, including MP3 players;
-- Third, to significantly expand the E-commerce opportunities for Spatializer
StreamFX(TM) and to broaden the use and distribution of our technology over the
Internet;
-- Fourth, to develop new applications and technology to comprehensively embrace
audio and voice enhancement for emerging markets such as Internet telephony,
satellite radio, voice over IP and cellular communications.
May 1 -- Randy Roscoe joins Spatializer as vice president of Sales and
Marketing.
Jun. 1 -- Retains an IR firm, MDC Group Inc., to increase the visibility of
Spatializer's brand and technology and to heighten awareness of the firm's
accomplishments within the financial markets.
Aug. 16 -- Toshiba Corporation agrees to include Spatializer N-2-2(TM) virtual
surround sound software in its SD2300 DVD player -- the first from Toshiba
utilizing the powerful interactive capabilities of the NUON processor developed
by VM Labs Inc.
Sep. 20 -- Hitachi Ltd. begins including Spatializer N-2-2(TM) virtual surround
sound across its entire DVD player line-up.
Sep. 25 -- Samsung Electronics Co. Ltd., Digital Products Division incorporates
Spatializer N-2-2(TM) audio enhancement technology into Samsung Extiva -- the
industry's first "all-in-one" entertainment station.
Oct. 5 -- LG Electronics includes Spatializer N-2-2(TM) in its new DVD-RW
(read/write) recorder. Spatializer N-2-2(TM) reproduces the spatial realism of
5.1 channels of Dolby Digital(R) through just two standard speakers.
Oct. 26 -- C-Cube Microsystems Inc. begins offering Spatializer N-2-2(TM) as the
audio enhancement technology option in its new ZiVA-5 DVD system processor --
the industry's most highly integrated DVD-Audio solution.
Nov. 15 -- 4Front Technologies announces the launch of Spatializer StreamFX(TM)
for Linux. This software plug-in for XMMS is a cross platform MP3 and Multimedia
player that is the most popular audio application on Linux. Spatializer
StreamFX(TM) is a plug-in for XMMS that provides rich 3D audio (that is stereo
expansion), enhanced bass support and support for headphone/speaker audio
adjustment. Spatializer StreamFX(TM) is available immediatels Henry R. Mandell.
He points out that one of the catalysts of this revolution is the advent of the
Digital Signal Processor (DSP) and RISC cores that processes digital information
very efficiently into more lifelike music and audio never before possible.
Mandell explains that this triggered an explosion in the proliferation of new
types of electronic entertainment devices. "It's our plan to be the dominant
developer of audio software to meet the needs of these emerging products,"
Mandell asserts. For example:
-- DVD Players: According to CEMA, annual units sales increased from 4 million
in 1999 to over 9 million in 2000. Units in 2001 are projected at 16 million,
growing to 28 million annually by 2003.
-- Internet Appliances: According to IDC, the overall market for Internet
appliances, including set-top boxes, handheld computers and gaming consoles, is
set to grow from 11 million units shipped in 1999 to 89 million units in 2004.
The market will grow from revenues of $2.4 billion last year to $17.8 billion in
2004.
-- Personal Digital Assistants: Cahners In-Stat Group predicts that PDAs will
see a unit growth of more than 80 percent from 1999 to 2003.
-- MP3 Players: Worldwide shipments of portable music devices are expected to
top 32 million units by 2003, according to Dataquest.
Digital Audio is Exploding -- Spatializer Well Positioned to Capitalize on the
Opportunity
-- Spatializer N-2-2(TM) virtual surround sound technology provides a compelling
value-added feature to DVD player manufacturers, enabling Spatializer to ride
the crest of the surging DVD player market.
-- Spatializer is well positioned to maintain its position as the "de facto"
virtual surround sound technology for the DVD market. No competing virtual
surround sound technology has more brand adoptions than Spatializer N-2-2(TM).
-- Set top boxes, Internet streaming audio and High Definition TV benefit from
Spatializer's digital surround sound technology.
Technically Advanced Audio Solutions
-- Spatializer 3-D Stereo(TM) provides a dramatic, surround sound effect with
just two speakers. A patented technology that accepts stereo or mono input,
Spatializer 3-D Stereo compensates for the limitations of computer audio, by
making small, inexpensive speakers produce more realistic and dramatic sound.
Spatializer 3-D Stereo also makes two-speaker home systems sound like there are
speakers all around, providing the end-user with the intensity and drama of
surround sound.
-- Spatializer N-2-2(TM) enables multi-channel audio playback from two
conventional speakers or headphones, instead of the standard 5 (or more)
speakers normally required. Spatializer N-2-2 allows OEMs to provide realistic
multi-channel audio in two-speaker computer and consumer electronics devices.
The combination of cost, space requirements and a complex set-up process often
make it difficult for consumers to justify full 5 (or more) speaker playback
systems. With the advent of high-density media such as DVD, DSS and HDTV, more
music, movies and software titles are being recorded with multi-channel audio
such as Dolby Digital (AC-3), Logic or MPEG audio. The N-2-2 solution retains
the spatial realism of the full home theater setups, while reducing the expense
and expanse for multi-speaker playback, plus adds a headphone playback option.
Since stereo source material is also widely available, Spatializer N-2-2 was
designed to automatically detect and enhance stereo; a transparent solution to
the end-user, N-2-2 provides a dramatic surround sound effect regardless of
input.
-- Spatializer Vi.B.E.(TM) provides a dramatic bass enhancement experience
through ordinary speakers. Spatializer Vi.B.E produces a dynamic bass response
from even the most low end "frequency response challenged" speakers or
headphones. Spatializer Vi.B.E is no mere bass boost. It uses proprietary
psycho-acoustic technology to generate the impression of realistic bass
frequencies that would ordinarily be difficult to discern in small PC, laptop or
portable headphone devices.
-- The Spatializer DigitalFX(TM) series is a comprehensive audio enhancement
software solution based on the company's renowned Spatializer N-2-2(TM) virtual
surround sound technology and Vi.B.E.(TM), the company's virtual bass
enhancement technology, combined with additional audio effects optimized for
specific product applications. This powerful combination of technologies in a
single product targeted for specific product applications provides a highly
efficient and cost effective solution for the following markets:
-- Spatializer Digital TVFX(TM) is a customized application of Spatializer
technology optimized for digital and analog televisions with an on board digital
signal processor. Spatializer integrates its original, patented 3D Stereo and
N-2-2 technologies with speaker-compensation and Vi.B.E. bass enhancement
algorithms. The digital processing of the stereo signal provides a striking and
immersive audio experience while the virtual bass enhancement creates apparently
deeper bass response from the small speakers utilized by most televisions.
Optional reverb and equalizer features further enhance the audio experience. The
result is a dramatic improvement to the overall audio sound field provided by
the television. Spatializer Digital TVFX(TM) is 100 percent digital, and
applicable to any TV system with an embedded DSP.
-- Spatializer Digital OntheGoFX(TM) is targeted specifically for portable MP3
player devices, including Personal Data Assistants (PDAs). According to industry
analysts, the portable MP3 player market is expected to grow to 32 million units
sold by 2003. Spatializer Digital OntheGoFX shares the same core 3D stereo
technology as other members of the Spatializer DigitalFX series, but sports a
highly effective headphone algorithm that produces an "out of head" audio
experience. In addition, the included Vi.B.E technology is particularly
effective in improving the limited bass response of inexpensive lightweight
stereo headphones often incorporated into these devices. The algorithms are
highly efficient, utilizing a minimal amount of MIPS any standard embedded DSP.
-- Spatializer Digital PCFX(TM) combines the entire suite of respected
Spatializer audio technologies into a single, comprehensive and cost effective
software audio solution for the Wintel platform. Since the product runs on the
host CPU, with minimal CPU utilization, no discrete chip is required.
Spatializer Digital PCFX(TM) provides Spatializer 3-D Stereo(TM), Spatializer
N-2-2(TM) virtual surround sound for DVD playback, Vi.B.E(TM) virtual bass
enhancement and enCompass(TM), Spatializer's positional audio technology for
computer games utilizing the Microsoft DirectX(TM) API. Apple Computer has
utilized Spatializer technology across their product platforms since October
1999.
-- Spatializer Digital AVFX(TM) is tailored for AV Receivers equipped with a
Dolby Digital decoder. Spatializer Digital AVFX provides Spatializer 3-D
Stereo(TM), Spatializer N-2-2(TM) virtual surround sound for DVD audio or video
playback, Vi.B.E(TM) virtual bass enhancement and in the future, extensive room
modeling and customized effects.
-- Spatializer Digital AutoFX(TM) enhances the audio performance of DSP-based
car stereo systems by delivering Spatializer's acclaimed 3-D Stereo, bass
enhancement, equalizer and reverb technology in a single solution. Optional
positional audio voice cues for on board GPS and navigation systems, virtual
surround sound for on board DVD player systems and space modeling will be
offered as per customer requirements.
Consumer Products
-- Spatializer StreamFX(TM) for Winamp is a plug-in providing greater control
over the PC audio experience. StreamFX for Winamp uses the same highly acclaimed
technology employed in the studio by numerous recording artists, in motion
pictures, and by many famous audio products manufacturers. StreamFX creates an
astonishing and enveloping sound experience out of any pair of regular speakers
or headphones and produces a dynamic bass response from even the most low end
"frequency response challenged" speakers or headphones.
-- Spatializer StreamFX(TM) for Linux is a plug-in for the XMMS media player
providing greater control over the PC audio experience. StreamFX for Linux uses
the same highly acclaimed technology employed in the studio by numerous
recording artists, in motion pictures, and by many famous audio products
manufacturers. StreamFX creates an astonishing and enveloping sound experience
out of any pair of regular speakers or headphones and produces a dynamic bass
response from even the most low end "frequency response challenged" speakers or
headphones.
Spatializer Audio Laboratories Inc. is a leading developer, licensor and
marketer of next-generation technologies for the consumer electronics, computing
and entertainment industries. The company's advanced audio technology is
incorporated into consumer electronics audio, video and DVD products from global
brand leaders including Toshiba, JVC, Panasonic, Hitachi, Samsung, Acer, Sharp,
Sanyo, LG, Emerson, Zenith and Proton, in PC multimedia systems and peripherals
from Apple, Dell, Gateway, Hewlett Packard, Sony, Fujitsu, Seiko-Epson, NEC,
Micron and Labtec, in silicon from Matsushita, New Japan Radio Corporation, ESS,
Zoran, Motorola, C-Cube, OnChip Systems, and Acer Laboratories Inc, and in
software compatible with MP3 players such as WinAmp and embedded with RISC cores
from MIPS Technologies.
Spatializer stock is traded on the OTC Bulletin Board under the symbol: SPAZ.
The company is headquartered in Santa Clara, CA., with marketing offices in
Tokyo, Japan. Further information may be obtained from Spatializer's SEC
filings, and by contacting the company's Investor Relations Department toll-free
at 888-825-0743 or by writing to spaz@mdcgroup.com. For media inquiries, please
contact Marken Communications at 408-986-0100 or by writing to
Andy@MarkenCom.com.
Safe Harbor Act Statement Under the Private Securities Litigation Reform Act of
1995: Certain information in this background news release, including the
comments by Mr. Mandell, are forward looking statements that are based on
management's belief, as well as assumptions made by, and information currently
available to management. While the company believes that its expectations are
based upon reasonable assumptions, there can be no assurances that the company's
financial goals will be realized. Numerous uncertainties and risk factors may
affect the company's actual results and may cause results to differ materially
from those expressed in forward-looking statements made by or on behalf of the
company. These uncertainties and risk factors include, but are not limited to
the continued need for additional capital, dependence on new technology and
intellectual property, dependence on the PC and consumer electronics industries,
dependence on product shipments of third-party licensees, competition and
pricing pressures, and other risks detailed from time to time in the company's
periodic reports filed with the Securities and Exchange Commission.
SOURCE Spatializer Audio Laboratories Inc.
CONTACT: David Castaneda, Investor Relations, 888-825-0743,
spaz@mdcgroup.com; or Andy Marken, Media Relations, 408-986-0
00,
andy@markencom.com, both for Spatializer Audio Laboratories I
c.
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