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Kodak and ESS Technology Announce Joint Development

Press release from the issuing company

ROCHESTER, N.Y.--July 18, 2001-- Eastman Kodak Company and ESS Technology, Inc. a leading provider of silicon solutions for digital video, communications, and digital home systems, announced today an agreement to develop features for DVD players that will enable consumers to view on their television sets the pictures they have stored on Kodak Picture CDs. Additionally, consumers will be able to send photographs to friends or order prints online through their television. Through this initiative, Kodak and ESS will aid the growth of the digital imaging and consumer electronics markets by enabling users to enjoy and share their pictures in the comfort of their living rooms. Kodak and ESS intends to offer the Kodak Picture CD service to consumers on DVD players and other electronic devices that carry the Kodak Picture CD compatibility mark. As part of this new initiative, ESS is offering DVD chipsets supporting these new capabilities to itsOEM customers worldwide. Kodak and ESS also have agreed to work together to simplify and promote online printing of digital images. Vialta, a subsidiary of ESS Technology, is launching a multifunctional ViDVDT player that offers Kodak Picture CD service, allowing families to view Kodak Picture CDs directly on their television. Planned future upgrades will also allow families to receive pictures directly through the ViDVDT player via a regular phone line. "DVD players with enhanced features are growing in popularity among consumers,'' said Dan Palumbo, president, Consumer Imaging, and senior vice-president of Kodak. "Together, Kodak and ESS will bring the benefits of digital photography to the mass marketplace and further enhance the ways consumers use and share their pictures.'' As technology presents new opportunities to expand and improve digital photography, Kodak and ESS will provide leading manufacturers and retailers with innovative DVD features, thereby providing them a complete high-quality, low-cost, DVD solution for the digital imaging and consumer electronics markets. In addition, ESS's JPEG digital image technology offers one of the most complete feature sets available, as follows: * Viewing Kodak Picture CD images on their TV by using a DVD player with ESS chipsets. * Enhancing picture viewing with the following standard ESS DVD features: * Automatic picture scaling to maximize TV display size * Image rotation * Thumbnail/catalog display in one screen for quick browsing * Slide-show features * Pan and zoom * Image special effects * In the future, consumers will be able to send pictures from an ESS/Vialta Internet-enabled DVD player for printing at Kodak's Internet photofinishing service. Robert Blair, president and chief executive officer of ESS Technology stated, "This initiative enhances ESS's leadership position in the growing consumer digital home systems market. By combining Kodak's infrastructure and services with ESS's technology and large customer base, we will be able to deliver comprehensive, easy-to-use DVD-based photography capabilities to consumers worldwide.'' Mr. Blair continued: "The convergence of TVs, digital photography, DVDs, and the Internet is happening rapidly throughout the world. The new technologies developed by this initiative between Kodak and ESS will create new products enabling consumers to easily view, send, and receive their digital images from the comfort of their living rooms. This initiative underscores the growing acceptance of infoimaging, and demonstrates Kodak's and ESS's leadership in bringing innovative services to the consumer market.'' Kodak and infoimaging This initiative will help drive the growth of two key infoimaging categories: infrastructure and services/media. Infoimaging is a $225-billion industry created by the accelerated convergence of image science and information technology. Infoimaging unites three closely-related imaging markets-devices, infrastructure, and services/media-enabling consumers and businesses to more easily use images as a fast and effective way to communicate. Infoimaging presents significant new revenue opportunities for any company that delivers value through the marriage of information and images. About ESS Technology ESS Technology, Inc., a leader in digital video, communications, and digital home systems, provides advanced semiconductor products enabling the convergence of communications, computer, consumer, and Internet markets. Headquartered in Fremont, California, ESS has R&D, sales, and technical support offices worldwide. ESS Technology's common stock is traded on the NASDAQ under the symbol ESST. ESS Technology's web site address is: http://www.esstech.com. About Vialta Vialta, a subsidiary of ESS, provides advanced, user-friendly, digital home entertainment products and services. The multi- functional ViDVD player is the first of many products to be developed using Vialta's digital home system platform. ViDVD is a trademark of Vialta. Vialta is headquartered in Fremont, California. Please visit our website at http://www.vialta.com.

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