JUNE 28, 1999
Zoran And MGI Software Form
Strategic Alliance To Deliver Comprehensive, State-Of-The-Art, DVD
And Multimedia Solutions
SANTA CLARA, CALIFORNIA, and
TORONTO, ONTARIO--Zoran Corporation (Nasdaq NM: ZRAN), a leading
provider of integrated circuits (ICs) and embedded software for
video and audio applications enabled by compression, and MGI
Software (TSE: MGI), a leading digital media applications vendor,
today announced a strategic partnership to address the burgeoning
demand for DVD hardware and software, a market projected to be
worth more than US $28 billion by 2001. As a first step, Zoran
will transfer to MGI the intellectual property related to
SoftDVD(TM), Zoran's leading DVD software decoder for PCs, along
with some of its related software development and support
resources in exchange for cash, MGI common stock, and future
royalties. Net of transaction costs and restructuring charges, the
transaction is not expected to have a material affect on Zoran's
second quarter operating results. MGI will immediately establish
Silicon Valley operations to support existing SoftDVD customers
and to enhance and integrate the Zoran technology into existing
and future MGI products. In addition, the two firms will
collaborate on future DVD and imaging solutions including digital
still cameras and other applications.
According to DVD Forum's value
projection of the global DVD market, by 2001 sales will rise to
$16 billion in DVD-ROM/RAM drives, $4 billion in DVD audio
players, and $8 billion in DVD video players/recorders. By
focusing on their respective strengths, Zoran and MGI have
positioned themselves to drive the DVD revolution into new markets
and applications by delivering a comprehensive set of leading DVD
and multimedia solutions to consumer electronics and computer
manufacturers. Zoran will continue to serve the consumer DVD
player market with its IC and embedded software solutions while
MGI will focus on the PC software DVD opportunity.
"The transition to DVD is well
under way," said Kathleen Maher, a market research analyst with
Jon Peddie & Associates (JPA) of Tiburon, California. "Zoran
and MGI have complementary interests in the video market. The two
companies have the resources to develop innovative solutions for
the rapidly evolving consumer electronics and personal computers
industries. They have the technology to capture a sizeable portion
of the business represented by DVD ICs and software-only DVD
solutions. By the year 2002, every device that touches the
Internet will include MPEG-2 technology in the forms of ICs or
software."
"We are refining our focus and
resources on advancing Zoran's leadership in the rapidly growing
consumer DVD market," said Dr. Levy Gerzberg, president and CEO
of Zoran. "Focusing our strategic direction in this way will
enable Zoran to continue to provide high-quality ICs and embedded
software solutions to the leading DVD OEMs, while MGI will be able
to leverage its PC software focus to lead the world in software
DVD technology for PCs. In addition, we expect both companies to
benefit from the strong complementary synergy which exists between
Zoran's programmable compression IC technology and MGI's software
capabilities."
"This deal immediately boosts
MGI's position as a provider of software-only DVD solutions, while
enhancing the research and development efforts we have undertaken
with DVD MAX(TM) and PURE DIVA(TM), which are already reshaping
the DVD marketplace," said Anthony DeCristofaro, president and
CEO, MGI Software. "We are acquiring proven technology,
resources, and a stellar customer base that we intend to support
and cultivate. We also see tremendous opportunities with Zoran in
the consumer digital photography and video editing markets."
Zoran is the leading supplier of
system-on-chip decoders for the consumer DVD market, with a
significant share of the world market. Its ICs are found in DVD
players from leading manufacturers such as Sharp Electronics,
Toshiba and others. In addition, leading PC and graphic card OEMs
such as Compaq, CompUSA, Hewlett-Packard, Diamond Multimedia (S3),
Matrox, Micron, and Packard Bell NEC currently use SoftDVD
technology in their products.
MGI entered the DVD solutions
market earlier this year with the introduction of DVD MAX and PURE
DIVA, which have been recognized for innovation and quality. DVD
MAX is the first product of its kind to be fully web-integrated,
offering technology updating facilities and DVD-commerce
opportunities, while PURE DIVA is the PC industry's first
software-only digital entertainment suite, which features a
digital VCR, Time-Shift TV, DVD movie theater, and CD music
player.
About MGI Software
MGI Software is one of the world's
leading digital media companies. The company's early focus on
delivering digital media editing technology to the mass market has
led to leadership in the PC photo and video editing market, with
more than 19 million units of its PhotoSuite and VideoWave
products shipped in retail and OEM channels spanning 25 countries.
The company has recently expanded its technological leadership to
encompass all digital entertainment media, including television,
movies, and music, with its DVD MAX, and PURE DIVA products.
Through its ever-growing network of Zoran & MGI Software
Announce Partnership partnerships with major consumer electronics
manufacturers, computer hardware and software vendors, photo
retailers and the entertainment industry, MGI is uniquely
positioned to take advantage of the revolution shaping our digital
lifestyles. MGI Software is headquartered in Richmond Hill,
Ontario and has sales offices in the US, UK, France, Germany,
Netherlands, Australia, Taiwan and Tokyo. For more information
visit http://www.mgisoft.com.
About Zoran Corporation
Zoran Corporation develops and
markets integrated circuits (ICs), IC Intellectual Property (IP)
cores, and embedded and PC software for digital audio and video
applications enabled by compression. Zoran also provides complete
reference designs based on Zoran's technology. Zoran's product
lines and IP include JPEG codecs, MPEG and DVD decoders, digital
still camera system on a chip and digital audio. All these
standard-based products benefit from Zoran's "Standards Plus"
technology. Zoran's ICs are used in numerous digital audio and
video products. Leading applications incorporating Zoran's
products and IP include professional and consumer video editing
systems, filmless digital cameras, standalone consumer DVD
players, SuperVCD players, digital speakers and audio systems.
Zoran is headquartered in Santa
Clara, California with additional operations in Haifa, Israel,
Toronto, Canada and offices in Tokyo, Japan and Shenzhen, China.
For more information visit www.zoran.com.
(C)MGI Software Corp.,1999. MGI,
MGI PhotoSuite, and MGI VideoWave, DVD MAX, PURE DIVA are
trademarks or registered trademarks of MGI Software Corp.
(C)Zoran Corporation 1999. SoftDVD,
StandardPlus are trademarks of Zoran Corporation. All other
company and/or product names are trademarks and/or registered
trademarks of their respective manufacturers.
FOR FURTHER INFORMATION PLEASE CONTACT:
MGI Software Corporation
Josef Zankowicz
905-707-3650
josefzmgisoft.com
or
Zoran Corporation
Karl Schneider
408-919-4247
irzoran.com
or
The Financial Relations Board
Catha Kawakami
Investors
415-986-1591
or
The Financial Relations Board
Hannah Bruce
General Information
415-986-1591
or
The Financial Relations Board
Lynne Farris
General Information
415-986-1591
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