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Creative Collaborates with Lucent Technologies and Centillium to Offer High-Speed, High-Bandwidth Solutions to Enable Media-Rich Content from the Internet

MILPITAS, Calif. - June 07, 1999 - Creative Technology Ltd. (NASDAQ: CREAF), the leading provider of multimedia solutions for personal entertainment, today announced the company's plans to offer broadband internet access solutions. Utilizing Lucent Technologies WildWire DSP1690-based chip set, Creative will offer internal PCI-based solutions for broadband connectivity for OEMs, system integrators and retail. Creative will also utilize Centillium's Optimizer chip set to be the first to market with an external USB-based solution that is ideal for home use. These solutions combined provide a family of flexible broadband options for the retail, OEM and system integrator channels that offer up to 1.5MBPS of download capacity - up to 26 times more bandwidth than 56K modems. Creative plans to offer these solutions through its channel partners and retailers beginning in Q3 of this year.

In line with the company's focus on delivering Personal Digital Entertainment solutions, these new broadband products will enable enhanced streaming multi-channel audio and video applications into the home and small business office. Compelling applications such as Internet music downloads and playback, Internet radio broadcasts, network gaming, video conferencing and broadcast video are driving demand for high-speed, high-bandwidth access to the Internet. According to industry research firm, Dataquest, there will be 7.4 million units of broadband modems sold by the year 2000. In order to meet this demand, Creative will offer a family of broadband solutions in Q3 of this year.

"As I've stated in the past, Creative's goal is to build better vehicles for the Internet information highway. These broadband solutions will deliver on this promise and enable a host of exciting audio and video enhanced Internet services and applications. It is our intent to be a leader in this new exciting market," said Sim Wong Hoo chairman and CEO of Creative Technology. "The broadband market is potentially a huge opportunity for Creative to deliver on the promise of media rich content on demand and a significantly better experience for consumers on the Internet."

Creative's Broadband Solutions Enable Easy, High-Bandwidth Access to the Internet
Based on ADSL G.LITE (ITU 992.2) technology, Creative's broadband solutions will deliver up to 1.5MBPS of bandwidth - up to 26 more times the bandwidth of 56K modems. ADSL G.LITE solutions do not require that a phone company visit a home or office in order to install the service - making these solutions a more cost-effective choice for consumers and an easier solution to deploy for vendors. These ADSL G.LITE modem solutions offer a connection that is "always-on," eliminating the need to "dial-up" an ISP each time a user wants to browse the Web. This means users can simultaneously send or receive faxes or have a phone conversation while browsing the Internet, using only a single phone line.

Creative's Solutions Enable Media-Rich Applications
Creative's broadband solutions are designed to complement its NOMAD line of portable digital audio players and its WebCAM line of Internet conferencing and video capture solutions. Consumers can now download rich audio and video content - Internet music downloads, radio programming or video email - personalize the content, and take it with them or share it with friends and colleagues. The new modem solutions also complement the company's Sound Blaster Live! line of digital audio cards and speaker systems to provide complete high-bandwidth solutions for digital entertainment in the home and small office.

Creative Utilizes Lucent's Technology To Offer Flexible Solutions
Utilizing Lucent Technologies WildWire modem communications chip set, Creative will offer an internal combination ADSL G.LITE and the conventional V.90 modem on a single PCI card. This solution allows the consumer to switch from V.90 to ADSL G.LITE capacity. Offering "always-on" functionality and up to 1.5MBS of bandwidth makes these solutions ideal for small office/home office and home use. Creative's Lucent-based products will be offered through the company's retail, OEM and system integrator channels.

Centillium Technology-Based Solutions
Creative will utilize Centillium's Optimizer chipset family to produce an external ADSL G.LITE solution with a Universal Serial Bus (USB) interface that offers up to 1.5MBS of bandwidth and an "always-on" experience for consumers. Centillium's low power design eliminates the need for and external power adapter offering an added benefit that when combined with the USB interface and external design, make this product an ideal solution for home and small business users. Creative will offer Centillium-based solutions through the company's retail, OEM and system integrator channels.

These solutions will begin shipping in Q3 of this year and are the first in a series of broadband product introductions, broadband alliances and partnerships from Creative.

This announcement relates to product that will be available in the United States of America. The product names, contents, prices and availability may differ elsewhere in the world according to local factors and requirements.

Safe Harbor for Forward Looking Statements:
Except for the historical information contained herein and in the accompanying conference call on today's date, the matters set forth herein and in the accompanying conference call (including our guidance on future revenues, margins, expenses and earnings) are forward looking statements that are subject to certain risks and uncertainties that could cause actual results to differ materially from those set forth in the forward looking statements. Such risks and uncertainties include, among others: potential fluctuations in quarterly results due to the seasonality of Creative's business and the difficulty of projecting such fluctuations; reductions in the market value of products sold by Creative, including increases in supply or declines in demand or prices for CD-ROM or DVD drives, board and chip-level products, and software products; the short product cycles that characterize most of Creative's products; the increasing proliferation of sound functionality at the chip and operating system levels; Creative's reliance on sole sources for many of its chips and other key components; the timely ramp, delivery and market acceptance of new products, including Creative's next generation audio, graphics accelerator, CD-ROM and DVD drives and communications products; the volatility of share prices for companies in Creative's industry and the effect of those prices or other events beyond Creative's control; and other risk factors described in Creative's filings with the Securities and Exchange Commission over the past twelve months.

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