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CREATIVE TECHNOLOGY AND LUCENT TECHNOLOGIES COLLABORATE ON NEW ADSL/V.90 MODEM

MILPITAS, Calif. - June 07, 1999 - Creative Technology Ltd., (NASDAQ: CREAF), the leading provider of multimedia solutions for personal entertainment, today announced that Creative has teamed with Lucent Technologies (NYSE: LU) Microelectronics Group to produce a new ADSL G.LITE/V.90 modem. Using Lucent Technologies' WildWire modem communications chip set, Creative will offer a combination ADSL and the conventional V.90 modem on a single PCI card. This will enable customers to use their existing V.90 modem connection and seamlessly switch to an ADSL connection when it becomes available to them. This dual functionality eliminates the additional cost of customers purchasing two separate modem products. Creative expects to be shipping the new ADSL G.LITE/V.90 modem in late Q3, 1999.

"Consumers benefit from this new relationship between Creative and Lucent because they can access both 56 kilobit per second and the faster DSL speeds using the same modem," said Surinder Rai, marketing director with Lucent's Microelectronics Group: "The relationship between Creative Technology and Lucent Technologies combines world class, system-level technology coupled with brand recognition in both the retail and business market segments."

"We are pleased to be collaborating with Lucent Technologies on this project," said Sim Wong Hoo, chairman and CEO of Creative Technology. "Their combination ADSL/V.90 chip set is very innovative, enabling Creative to offer our customers outstanding performance, features, and flexibility on a single PCI card. Over the last year, Creative has become a leader in the communications market with our Modem Blaster line of products, achieving a top market share in retail. Lucent's technology is allowing us to be the first to enter the retail space and deliver cost-effective solutions for residential customers, telecommuters and small businesses."

ADSL Solutions Offer High-Bandwidth and Easy Installation
ADSL (Asynchronous Digital Subscriber Line) modems offer users many advantages over current V.90 analog modems, most significantly, the ability to send and receive digital data at ultra-high speeds over the existing telephone lines found in virtually all homes. ADSL modems (also referred to as "digital modems"), utilize a special digital coding technique which can deliver up to 26 times the bandwidth of a 56K modem. Creative's ADSL G.LITE solution based on Lucent's WildWire chip does not require that a phone company visit a home or office in order to install the service. With ADSL G.LITE technology users can simultaneously send or receive faxes or have a phone conversation while browsing the Internet, using only a single phone line. An ADSL G.LITE modem connection is "always-on," eliminating the need to "dial-up" an ISP each time a user wants to browse the Web. This is similar to a cable TV connection, in that the cable signal is always being transmitted, and turning on the TV accesses the data. With an ADSL G.LITE connection, a user can simply run their Internet browser application and they are instantly connected to the Internet.

The Creative ADSL/V.90 modem will allow users to experience significantly improved high-speed data communications. Data communications will include Internet access, telecommuting (remote LAN access), and specialized network access. Creative is also collaborating with Lucent to develop a digital audio/V.90 modem solution on a single PCI card.

This announcement relates to product being introduced 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.