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Creative Introduces Xmod - the First External X-Fi® Device that Improves Digital Music Beyond CD Quality

Music Listening Experience for Millions of People on their PC, Mac, iPod or ZEN Will Never Be the Same Again

SINGAPORE, - October 3, 2006 - Creative (NASDAQ: CREAF), a worldwide leader in digital entertainment products, today announced that it has invented the Creative Xmod, a device based upon its X-Fi® Xtreme Fidelity™ audio platform that improves music playback quality for MP3, WMA, iTunes or AAC songs to beyond the original CD quality. The Creative Xmod is a small device just about the size of a candy bar. It connects between stereo speakers or headphones and either a PC, Mac, iPod, ZEN™ or any MP3 player, and it dramatically improves the listening experience by upconverting the music during playback to the X-Fi Xtreme Fidelity standard - very high-quality 24-bit surround audio.

The Creative Xmod enhances the low and high frequencies while improving audio dynamics for cleaner, richer sound that surpasses the original audio CD. Without requiring to install any software, it takes just seconds to connect to a PC or Mac, allowing users to instantly improve the playback quality of their music to the X-Fi Xtreme Fidelity experience. For connecting iPod, ZEN or any MP3 players to the Creative Xmod, an optional AC power adaptor is required.

"There are more than 100 million people who listen to MP3, WMA or AAC music on their PCs, Macs or iPod or ZEN players, but the quality of these compressed music are highly compromised. The Creative Xmod enables them to listen to their music with audio that sounds even better than CDs." said Sim Wong Hoo, chairman and CEO of Creative. "Now with Creative Xmod, all your music is instantly upconverted to Xtreme Fidelity standard in realtime through a simple and compact device!"

There is no need to re-purchase music in a new format to experience X-Fi Xtreme Fidelity. Just connecting the Creative Xmod enables Mac users to experience award-winning X-Fi Xtreme Fidelity audio for the first time, and PC users can now enjoy it for the first time on the notebook. The Creative Xmod does not require cumbersome or time-consuming conversion of files - it literally connects in seconds to play back existing music files in X-Fi Xtreme Fidelity.

X-Fi Xtreme Fidelity provides two important audio functions, X-Fi Crystalizer and X-Fi CMSS-3D, which improve and enhance music listening experiences. The X-Fi Crystalizer upconverts MP3 music by analyzing and identifying which parts of the audio stream have been truncated or damaged during compression. It intelligently and selectively restores the highs and lows such as the snare drums, basses, cymbals crashes and guitar plucking that are damaged during the compression of MP3s.

Ideal for movies or an immersive audio experience, X-Fi CMSS-3D creates virtual surround sound through speakers or headphones. It expands audio for superior headphone listening so music completely surrounds the listener like a multi-channel speaker system instead of sounding like it is stuck between the headphones. X-Fi CMSS-3D also uses advanced techniques to place specific audio elements, such as the voice of a movie character, in the virtual center channel while ambiance is played through virtual surround channels.

Pricing and Availability
The Creative Xmod will be available in October at a suggested retail price of US$79.99. For more information about the Creative Xmod and X-Fi Xtreme Fidelity, please visit http://www.creative.com/.

About Creative
Creative (NASDAQ: CREAF) is a worldwide leader in digital entertainment products. Famous for its Sound Blaster sound cards and for launching the multimedia revolution, Creative is now driving digital entertainment on the PC platform with products like its highly acclaimed ZEN™ portable audio and media players. Creative's innovative hardware, proprietary technology, applications and services leverage the Internet, enabling consumers to experience high-quality digital entertainment -- anytime, anywhere.

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This announcement relates to products launched in Asia Pacific. Availability is subject to change without notice and may differ elsewhere in the world according to local factors and requirements. Creative Xmod, Xtreme Fidelity, X-Fi, X-Fi Crystalizer, X-Fi CMSS-3D and Sound Blaster are trademarks or registered trademarks of Creative Technology Ltd. in the United States and/or other countries. All other brand or product names are trademarks of their respective owners.