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Thomson and Qualcomm Restructure Technicolor Digital Cinema Joint Venture

– August 21, 2003 – Paris, France; Burbank and San Diego, CA, August 21, 2003 -- In a strategic step to more effectively serve the needs of the emerging digital cinema industry, Thomson (Euronext Paris; 18453; NYSE: TMS), the worldwide leader in video technologies, products and services and Qualcomm Incorporated (Nasdaq: QCOM), today announced that Qualcomm has sold its equity interest in Technicolor Digital Cinema (TDC) to Thomson, the parent company of Technicolor, a move that results in sole Thomson ownership of the venture. Financial terms of the sale were not disclosed.

The agreement allows both entities to leverage Technicolor Digital Cinema's successful systems and service model while enabling each to focus on their respective core businesses - Technicolor in servicing the digital cinema needs of its customers and Qualcomm in developing and producing innovative digital cinema technology and systems. The transaction is also consistent with Thomson's commitment to support content owners and network operators globally as they evaluate and embrace digital technologies.

"Many of the objectives of forming the joint venture company in 2000 have been met," said Gary Garland, Vice President and General Manager of the Qualcomm Digital Media Division. "With the combination of Technicolor's service legacy to the entertainment industry and Qualcomm's technical expertise in digital cinema enabling technologies, we hoped to move digital cinema forward by providing both systems and services specific to the digital cinema space. We have done that, and we've done it exceptionally well."

As part of the restructuring, Technicolor will acquire exclusive rights to manufacture, sell and service the multi-screen Theatre Management System (TMS) designed by Qualcomm under the Technicolor Digital Cinema umbrella. In turn, Qualcomm will continue to develop and market core digital cinema products and technologies, including decoder modules, encoders and conditional access systems (CAS) that are based on its ABSolute™ compression and decryption technology.

"This is a positive move that provides customers the freedom to independently select a service provider and a technology architecture that best fits their needs," said Dave Elliott, President of Technicolor Entertainment Services and Chief Executive Officer of Technicolor Digital Cinema. "Our intent has always been to offer the industry options. By restructuring the joint venture, we expand customer choice while at the same time restoring Technicolor's legacy to serve multiple architectures and enhancing Qualcomm's ability to market their advanced digital cinema technologies."

Technicolor and Qualcomm will continue to work closely together as Qualcomm digital cinema technologies and products emerge, including ABSolute image compression technology and advanced security architecture as well as Qualcomm's digital cinema decoder modules, encoder systems, and conditional access equipment for the industry. Technicolor Digital Cinema will continue to provide and support these technologies and products, but will also offer other technologies to meet industry demand and requirements.

Since launching in 2000, Technicolor Digital Cinema has evolved to offer the industry's most comprehensive set of digital cinema services and solutions, including compression, encryption, distribution, storage, and scheduling/playback as well as in-theatre management systems, maintenance and support. Technicolor Digital Cinema has installed and maintained digital cinema delivery technology and equipment through Qualcomm-designed Auditorium Management Systems in nearly 40 theatres worldwide for first-run showings of digital movies. To date, Technicolor Digital Cinema has processed, packaged, delivered and downloaded 42 motion picture titles for a total of more than 50,000 showings to commercial audiences, including four titles that were released using the world's first end-to-end encryption approach, provided by Qualcomm's technology. Recent encrypted digital cinema releases include Finding Nemo, Pirates of the Caribbean, X Men 2 and Spy Kids 3.

Thomson and Technicolor Digital Cinema will continue to work with content owners toward advancing the digital cinema evolution by developing robust systems, support services and industry standards in anticipation of the widespread adoption of this new medium. Qualcomm will continue to develop and provide advanced digital cinema technologies and products to meet industry requirements on an open-systems basis to OEM's, service providers and end-users.

About Thomson
Thomson (Euronext Paris: 18453; NYSE: TMS) provides a wide range of video (and enabling) technologies, systems, finished products and services to consumers and professionals in the entertainment and media industries. To advance and enable the digital media transition, Thomson has four principal divisions: Content and Networks, Consumer Products, Components, and Licensing. The company distributes its products under the Technicolor, Grass Valley, THOMSON and RCA brand names. For more information:http://www.technicolor.com/en/hi/contact-support/other-brands/thomson

Technicolor Entertainment Services (TES), part of Thomson's Content and Networks division, is the number one processor of motion picture film worldwide and a leading provider of creative/post-production, cinema distribution and digital cinema services. With facilities worldwide, TES service lines include:

  • Technicolor Release Print Services processes and prints 16/35/65/70 mm formats, dailies, answer prints, intermediates, and trailers.
  • Technicolor Creative Services provides production, post-production and post post-production services ranging from film and audio restoration and preservation, in both analog and digital formats, to DVD compression and authoring, VOD encoding, to episodic television and commercial advertising completion.
  • Technicolor Cinema Distribution Services provides high-quality distribution and logistics management services for motion picture release prints and advertising collateral through state-of-the-art technologies and an efficient distribution pipeline.

About Qualcomm
Qualcomm Incorporated (www.qualcomm.com) is a leader in developing and delivering innovative digital wireless communications products and services based on the Company's CDMA digital technology. Headquartered in San Diego, Calif., Qualcomm is included in theS&P500 Index and is a 2003 FORTUNE 500® company traded on The Nasdaq Stock Market® under the ticker symbol QCOM.

Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including the Company's ability to successfully design and have manufactured digital cinema products on a timely and profitable basis, the extent and speed to which digital cinema technology is deployed, change in economic conditions of the various markets the Company serves, as well as the other risks detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended September 30, 2002, and most recent Form 10-Q.

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Topics: Corporate
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