News Release

NIPPON TELEGRAPH AND TELEPHONE CORPORATION KOBE STEEL, LTD.

NTT and Kobe Steel
to enter network audio player business

TOKYO (July 23, 1998) -- NIPPON TELEGRAPH AND TELEPHONE CORPORATION (or NTT) and KOBE STEEL, LTD. have developed a credit card-size network audio player, the world's smallest, which can obtain audio contents from networks. Security technology and systems will be used to protect against illegal copying.

The two companies plan to commercialize the player, tentatively called SolidAudio, beginning in the first half of fiscal 1999. As well, NTT and Kobe Steel will launch the SolidAudio Project on July 24 to grow a new audio delivery business that would supply audio contents to the players. The Project seeks partners for manufacturing, marketing, customer services, and audio content delivery.

By 2002, the project aims to ship 1 million players. With related services, the project anticipates sales of 30 billion yen. In addition to Japan, the project also hopes to seek opportunities in the overseas market.

Multimedia networks, such as the Internet, enable people to listen to audio contents from around the world. However so far, few handheld devices enable listening to network-based audio while on the move. SolidAudio, the world's smallest network audio player, addresses this need by downloading audio contents from networks and playing it back at CD quality.

The audio contents would be obtained from special downloaders or computer ports in homes, offices and public places, such as kiosk terminals. Only legal channels will be used for downloading. Copy guard, digital watermarking and other security measures will be required for safe content delivery, as well as to prevent illegal copying onto other types of players or computers. All this will lead to the creation of new audio distribution channels. Both NTT and Kobe Steel will be responsible for developing customer services, security systems, user fees and user authorization.

Potential applications for audio delivery include foreign language study material, news and sound magazines,music promotion, interviews and lectures, and even karaoke practice songs.

SolidAudio is the world's smallest and lightest network audio player. The player measures 85.4 mm in length, 54 mm in width and 8.4 mm in thickness. The unit weighs 45 grams including an ultra-thin lithium-ion polymer battery. The 16-megabyte memory enables the replay of 25 minutes of CD-quality music or 50 minutes at FM quality.

The player uses high sound quality compression technology developed by NTT called TwinVQ. Superlative to the MPEG Layer 3 compression format, TwinVQ yields CD quality sound. Kobe Steel is responsible for combining TwinVQ with digital signal processor semiconductors, as well as developing the audio player.

TwinVQ
TwinVQ (Transform-domain Weighted Interleave Vector Quartization) is a high performance audio compression technology developed by NTT Human Interface Laboratories. Noted for its high compression ratio of 1:18, TwinVQ reproduces CD quality sound. TwinVQ will be a part of the ISO/IEC MPEG 4/Audio standard.

MPEG Layer 3
This ISO-standard audio software technology enables audio data to be compressed at ratios of 1:10 to 1:12.

Lithium-ion polymer battery
Developed by Yuasa Corporation, this 3.6-volt card-size battery is only 1.35 mm thick and has a capacity of 175mAh.

Further information is available at:
http://www.solidaudio.ne.jp/

Contacts at NTT

Contacts at Kobe Steel