Microsoft and Dolby to Bring High-Quality Audio to PCs; Demonstrate New
Technology at WinHEC 96

Dolby Supports Microsoft's Simply Interactive PC Vision as a Home
Entertainment Device

SAN JOSE, CALIF. - APRIL 1, 1996 - Microsoft Corp. and Dolby Laboratories
Inc. said today they intend to bring high-quality Dolby Surround Sound
audio to personal computers, giving developers and consumers an exciting
new dimension to interactive PC software. This alliance is another step
toward Microsoft's Simply Interactive PC vision to make the PC platform a
center of entertainment, providing the ease of use and convenience of a
consumer appliance.

Microsoft and Dolby signed a letter of intent to jointly develop
technologies and specifications to support the use of Dolby's
industry-leading theater-quality sound systems, including Dolby digital
AC-3 technology to decode multichannel audio for use by six-speaker
Surround Sound stereo systems.

The companies made the announcement and demonstrated the technology here
today at the Windows Hardware Engineering Conference (WinHEC 96). They
also demonstrated a digital video disk ROM (DVD-ROM) movie clip on a PC
using the MicrosoftR ActiveMovie API and Dolby digital AC-3 technology.

"The PC is about to take on a new, starring role in the home as a leading
entertainment device, and our agreement with Microsoft is a major step
toward making that happen," said Ed Schummer, vice president at Dolby.
"Microsoft's vision is compelling and exciting, and we're delighted to
participate in making it happen."

"Bringing the PC to the home entertainment center requires giving it the
best possible audio abilities," said Carl Stork, director of Windows
platforms at Microsoft. "With the support of Dolby - the leader in quality
audio standards - we're working to make that happen."

Also here today at WinHEC 96, Microsoft announced other key technologies
for the Simply Interactive PC (SIPC), including the OnNow design
initiative for systemwide power management and the Win32 Driver Model for
more powerful integration of PCs and peripheral devices. SIPC technologies
also include support for new ways to connect to consumer electronics
devices such as the IEEE 1394 bus and Universal Serial Bus; the ActiveX
and DirectX technologies for real-time interactive 3-D graphics, audio and
video; advances in PC telephony; and enhancements to the Microsoft
Internet Explorer Web browser.

Additional information about the Simply Interactive PC is available on the
Microsoft Web site at
http://www.microsoft.com/windows/thirdparty/hardware/.

Dolby Laboratories Inc. is the developer of audio signal processing systems
used worldwide in consumer audio and video products, on consumer audio and
video entertainment software, and in professional sound applications that
include music recording, broadcasting and motion- picture sound. The
privately held company has its world headquarters in San Francisco, with
offices in New York and Los Angeles, and European headquarters in
England.

Founded in 1975, Microsoft (NASDAQ "MSFT") is the worldwide leader in
software for personal computers. The company offers a wide range of
products and services for business and personal use, each designed with
the mission of making it easier and more enjoyable for people to take
advantage of the full power of personal computing every day.
 
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