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CREATIVE LABS SECURES THE #1 POSITION IN U.S. RETAIL AND DISTRIBUTION OF PC SPEAKER SYSTEMS

Creative Increases its U.S. Market Share To Become the Leading Supplier of PC Speakers Nationwide

MILPITAS, Calif. - May 26, 1999 - Creative Technology Ltd. (NASDAQ: CREAF), the renowned innovator of market-leading multimedia solutions for personal entertainment, announced today that it has captured the leadership position in U.S. retail and U.S. distribution channels for the PC speaker category. In both March and April, Creative was the leading speaker company in revenue share in the U.S. retail market with nearly 23 percent share over both months. According to PC Data*, Creative has been the leader in U.S. distribution of PC speaker systems since August of 1998, maintaining a unit market share of over 40 percent during that time.

Based on the recent PC Data report, Creative has now become the market leader pulling ahead of such competition as Altec Lansing, Microsoft and Bose. Creative advanced its position with its acquisition of Cambridge SoundWorks in December 1997 - the leading speaker manufacturer famous for its high-performance home theater, home stereo speaker systems as well as its critically acclaimed multimedia speakers.

"Creative has leveraged the brand strength of its Cambridge SoundWorks' family of speakers into the number one position in distribution and retail," said Steve Baker, director of Hardware Services and Analysis at PC Data, a research firm specializing in the retail and distribution market. "The company's brand name is well recognized for high-quality, high-performance and reliability and its recent sales performance shows that consumers recognize this."

Among the award-winning speaker systems that have contributed to Creative's market leading position are:

• FourPointSurround FPS2000 Digital - Targeted at power gamers and PC enthusiasts this four-channel surround speaker system delivers a clean, more precise 3D digital audio experience
• DeskTop Theater 5.1 - Uniquely designed for a truly immersive movie experience, the DTT 5.1 is a complete speaker system that includes a Dolby Digital decoder/amplifier offering the most affordable Dolby Digital solution for PC entertainment
• PCWorks FourPointSurround FPS1000 - Based on Cambridge SoundWorks' PCWorks award winning design, this speaker system is the first sound system to deliver four-channel audio through four discreetly powered satellite speakers
• PCWorks - this critically-acclaimed three-piece amplified speaker system which comes with two satellite speakers and a powered subwoofer delivers astounding sound quality at a phenomenal price

Creative with its Cambridge SoundWorks speaker systems has set an industry standard for high quality performance. In 1999 alone, Cambridge SoundWorks' speaker systems have garnered prestigious awards and accolades such as the PC Gamer "Editors' Choice" for the FourPointSurround FPS2000 Digital. AGN3D Hardware gave the FourPointSurround FPS2000 Digital a "Ten out of Ten Stars" rating while PC Works FourPointSurround was featured on the "WinList" for Windows Magazine . The FPS2000 Digital system also received the "Drool Award" from Gamers Depot and the "Stamp of Approval" from Gamer's Alliance. The PCWorks FourPointSurround received the "Editors' Choice" and "Best Peripheral" awards from PC Games.

"We have continued to expand on our design expertise to include high quality speaker systems that offer the surround-sound experience at an accessible price," said Tom Hannaher, senior vice president of Marketing for Cambridge SoundWorks. "It is exciting to see that our new PC speaker systems have been embraced by the PC industry and to know that audio savvy customers are choosing Creative's Cambridge-designed speakers.

This announcement relates to products 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.

*PC Data is a research firm specializing in the retail and distribution market.