Creative Labs annouce an updated release of their feature packed ZEN media player but with a new control mechanism, touch pad replaces the side mounted jog wheel on the original 2002 release of the ZEN

The design, touchpad, battery life and pricepoint are competitive with the Apple iPod.

CREATIVE ZEN TOUCH Portable Audio Player Features Ultra-cool Vertical Touch Pad Scrolling and Patented Technology Achieving up to 32-hour Battery Life*

Find your favorite songs with a touch and a drag of your finger

SYDNEY - AUGUST 2, 2004 - Creative Labs Pty Ltd, local subsidiary of Creative Technology Ltd (NASDAQ: CREAF) a worldwide leader in digital entertainment products for PC users, today introduced the Zen Touchââ??¢, a 1.8-inch hard drive-based portable audio player that holds up to 10,000 songs in WMA format or 5,000 songs in MP3 format. Available at the end of August 2004, the Zen Touch comes with a 20GB hard drive and includes an extra bonus, FM-wired remote control currently retailing for AUD$149.95 inc GST. The recommended retail price of the Zen Touch will be at AUD$499.00 inc GST which includes the bonus FM-Wired Remote.

The Zen Touch features the innovative patent pending "Touch Pad" control, which allows users easier access to their musical selections. The face of the player also features a dedicated "Random" button for spontaneous music playback of any combination of songs.

"The Zen Touch is so easy and fun to use because the touch pad allows the user to find their favorite songs with a touch and drag of their finger on the touch pad in a natural, vertical motion. This makes it more intuitive than a circular motion in locating songs, or you can just hit the random button for a mix of music to match any mood," said Sim Wong Hoo, Chairman and CEO of Creative Technology Ltd. "Plus you can take the Zen Touch on long trips and leave the power cable at home without worrying about the rechargeable battery running out too soon."

Equally as cool-looking as it is feature-rich, the metallic graphite and white gloss-coloured Zen Touch displays track and menu information on its large, brilliant blue backlit LCD screen and boasts a handy "Find" feature so that you get to your favorite music in no time. In addition to its groundbreaking battery life and super-intuitive user interface, the Zen Touch provides industry-leading audio quality and broad compatibility with the legal download music services supporting the secure WMA music format. Crystal-clear high fidelity playback at 97dB SNR can be customized with a four-band graphic equalizer with eight equalization presets. USB 2.0 connectivity enables fast music transfer from a PC as quickly as a song per second.

Zen Touch incorporates a patented technology that significantly extends its battery life up to 32 hours (*based on MP3 48Kbps compression rate). Even on more power-hungry high-quality music of 128Kbps compression, its battery life is still impressively over 24 hours (using fresh batteries).

Exclusively previewed by Microsoft at the 2004 WinHEC event, the Zen Touch was showcased as the first player to support upgrades to the next generation of Windows Media Digital Rights Management (DRM) technology, a platform for providing exciting new subscription models for content download.

"With its exciting new device, the Zen Touch, Creative sets a new bar for battery life and provides music fans a broad choice of music services accessed within Windows Media Player," said Jonathan Usher, director of the Windows Digital Media Division at Microsoft Corp. "The Zen Touch is the first in a new line of products from Creative that will support our next generation Windows Media DRM, enabling new playback scenarios for subscription-based or on-demand digital music."

The new Creative Zen Touch 20GB, priced at AUD$499.00 inc GST is slated for shipping in August 2004. The ultra-portable audio player comes with a black protective case, Neodymium headphones, a USB 2.0 cable, and a universal power adapter, PLUS FM-Wired LCD Remote control currently sold as an accessory for AUD$149.95 inc GST. The player also includes Creative MediaSourceââ??¢, an easy-to-use application for ripping CDs, organizing entire digital music collections, and easily transferring MP3 and WMA files.

For more information about Creative portable audio players, please visit www.australia.creative.com

* 32-hour battery life rated when using fresh battery running 48Kbps MP3 music continuously.

About Creative Labs Pty Ltd

Creative Labs Pty Ltd started operating in Australia back in February 2000 and is a wholly owned subsidiary of Creative Technology Ltd. Just recently, Creative Labs expanded its operation to a new showroom and office situated on busy Parramatta Road in Sydney. The new address is Shop 3-5, 524 Parramatta Rd, Petersham NSW. Telephone: (02) 9021 9800.

Creative (NASDAQ: CREAF) is a worldwide leader in digital entertainment products for PC users. Famous for its Sound Blasterââ??¢ sound cards and for launching the multimedia revolution, Creative is now driving digital entertainment on the PC platform with products like its highly acclaimed NOMADÃ?® Jukebox MP3 player. Creative's innovative hardware, proprietary technology, applications and services leverage the Internet, enabling consumers to experience high-quality digital entertainment -- anytime, anywhere.

This announcement relates to products launched in the Asia Pacific. The product names, prices and availability are subject to change without notice and may differ elsewhere in the world according to local factors and requirements. Creative, MediaSource, and Sound Blaster are trademarks or registered trademarks of Creative Technology Ltd. in the United States and other countries. NOMAD is a registered trademark of Aonix and is used under license.