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SONICblue reported a net loss for the third quarter of $32.4 million or ($0.33) per share. This compares with a net loss of $55.3 million or ($0.62) per share for the third quarter of 2001. The Company's pro forma third quarter operating loss was $13.7 million, or ($0.14) per share, meeting our revised guidance. This compares with a third quarter 2001 pro forma operating loss of $17.7 million, or ($0.20) per share. Pro forma operating results reflect the reported third quarter loss from operations of $25.2 million in 2002 and $34.5 million in 2001, less in-process research and development, restructuring expense and impairment charges, and amortization of goodwill, intangibles and non-cash deferred compensation.

"We have made decisions this quarter that were critical in our effort to drive towards improving operating results," said Gregory Ballard, chief executive officer, SONICblue. "We expect the effect of these decisions to create a positive trend beginning in the fourth quarter and continuing beyond."

"Our Go-Video product line continued to be the primary driver of revenue growth in the third quarter with the combination DVD / VCR being our highest volume product," said Marcus Smith, chief financial officer, SONICblue. "We continue to experience downward pricing pressures on our DVD / VCR combination product and single deck DVD player. The decreased average selling prices combined with higher sales volumes of the combination product and single deck DVD player significantly impacted gross margin."

The Company ended the quarter with approximately 120 million shares of UMC, which have a market value of approximately $81.8 million, based on the closing price of UMC shares on the Taiwan Stock Exchange and the prevailing U.S. dollar to New Taiwan Dollar exchange rate on Sept. 30, 2002.

Throughout the third quarter SONICblue continued to expand its product base, launching several new digital audio products including the Rio 900, Rio S10 and Rio S30. In addition, the Company announced the compatibility of Rio players with the latest version of pressplay and Windows Media Audio. The Company licensed its patented Dual-Deck(TM) technology to JVC to be incorporated into certain JVC-branded combination products including a DVD/VCR. The pricing structure for ReplayTV was expanded to offer both monthly and lifetime subscription options, and the Company announced it was working with Intel to develop a portable Replay device.

About SONICblue Incorporated (www.SONICblue.com)

SONICblue is a leader in the converging Internet, digital media, entertainment and consumer electronics markets. Working with partners that include some of the biggest brands in consumer electronics, SONICblue creates and markets products that let consumers enjoy all the benefits of a digital home and connected lifestyle. SONICblue holds a focused technology portfolio that includes Rio® digital audio players; ReplayTV® personal television technology and software solutions; and Go-Video® integrated DVD+VCRs, Dual-Deck(TM) VCRs, and digital home theater systems.

Except for the historical information contained herein, the matters set forth in this press release, including statements as to the Company's effort to drive towards improving operating results and expected results of this effort, including a positive trend beginning in the fourth quarter, and expectations regarding downward pricing pressures, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, including, but not limited to, the Company's ability to implement its business plan and reduce expenses, including supplier costs, the impact of competitive products and pricing and of alternative technological advances, manufacturing and shipping difficulties, fluctuations in consumer demand due to economic developments and uncertainties, and other risks detailed from time to time in the SEC reports of SONICblue Incorporated, including its annual report on Form 10-K for the period ended December 31, 2001 and its quarterly report on Form 10-Q for the quarter ended June 30, 2002. These forward-looking statements speak only as of the date hereof. SONICblue disclaims any obligation to update these forward-looking statements.

Note to Editors: SONICblue and Dual-Deck are trademarks of SONICblue Incorporated. ReplayTV, Go-Video and Rio are registered trademarks of SONICblue Incorporated. All other products and brand names as they appear in this release are trademarks or registered trademarks of their respective holders.

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                        SONICblue INCORPORATED
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                (In thousands, except per share data )

                          Three Months Ended      Nine Months Ended
                       September   September   September   September
                           30,         30,         30,         30,
                          2002        2001        2002        2001
                       ----------- ----------- ----------- -----------
                       (Unaudited) (Unaudited) (Unaudited) (Unaudited)

Net sales                 $78,393     $54,783    $205,143    $134,177

Cost of sales              73,289      46,572     175,267     210,246
                       ----------- ----------- ----------- -----------
Gross profit (loss)         5,104       8,211      29,876     (76,069)

Operating expenses:
 Research and
  development               3,925       6,627      12,330      23,748
 Selling,
  marketing and
  administrative           14,916      19,246      44,354      78,231
 In-process R&D                --       4,200          --       5,078
 Restructuring
  expense and
  impairment
  charge                    7,603       7,226      21,234     129,459
 Amortization of
  goodwill, intangibles
  and non-cash deferred
  compensation              3,883       5,402      11,984      27,690
                       ----------- ----------- ----------- -----------
    Total operating
     expenses              30,327      42,701      89,902     264,206
                       ----------- ----------- ----------- -----------

Loss from operations      (25,223)    (34,490)    (60,026)   (340,275)

Gain (loss) on UMC
 investment                    --     (17,715)      5,133    (545,672)
Gain (loss) on other
 investments               (2,927)     (3,119)     (6,593)    (24,709)
Interest Expense           (5,548)     (2,696)    (12,159)     (8,844)
Other income
 (expense), net             1,336       2,730       1,259       1,666
                       ----------- ----------- ----------- -----------
Income (loss) before
 income taxes             (32,362)    (55,290)    (72,386)   (917,834)

Income tax benefit             --          --          --    (214,233)
                       ----------- ----------- ----------- -----------

Net income (loss)        ($32,362)   ($55,290)   ($72,386)  ($703,601)
                       =========== =========== =========== ===========
Per share amounts

 Basic                     ($0.33)     ($0.62)     ($0.75)     ($8.34)

 Diluted                   ($0.33)     ($0.62)     ($0.75)     ($8.34)

Shares used in
 computing per share
 amounts:

 Basic                     97,650      89,873      96,165      84,346

 Diluted                   97,650      89,873      96,165      84,346


                        SONICblue INCORPORATED
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                        (dollars in thousands)


                                             September    December
                                                30,          31,
                                                2002        2001
                                             (unaudited)

ASSETS
Current assets:
 Cash and other investments                   $ 12,818    $ 22,081
 Investment - UMC                               64,679      75,907
 Accounts receivable, net                       60,664      30,986
 Inventories                                    28,834      20,571
 Prepaid expenses and other                      6,685       8,003
                                              ---------   ---------

    Total current assets                       173,680     157,548

Property and equipment, net                      6,164       7,218
Investment - UMC                                25,184      86,886
Deferred taxes                                   7,665      15,197
Goodwill and intangible assets                 124,514     128,426
Other assets                                     5,664      18,232
                                              ---------   ---------

    Total                                     $342,871    $413,507
                                              =========   =========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
 Notes payable                                  28,533      15,826
 Accounts payable                             $ 40,496    $ 46,556
 Accrued liabilities                            88,485     116,304
 Deferred taxes                                  7,665      15,197
                                              ---------   ---------

    Total current liabilities                  165,179     193,883

Other long-term liabilities                     23,945      22,764
Convertible subordinated debentures            146,349     103,300
                                              ---------   ---------

    Total liabilities                          335,473     319,947

Stockholders' equity                             7,398      93,560
                                              ---------   ---------

    Total                                     $342,871    $413,507
                                              =========   =========

Certain prior period amounts have been reclassified to conform to the
current year presentation.

Contact:

     SONICblue
     Amanda Sanyal, 408/588-8060 (Press)
     asanyal@sonicblue.com
     Ian Shea, 408/588-8242 (Investor Relations)
     ir@sonicblue.com