Thomson and QUALCOMM Restructure Technicolor Digital Cinema Joint Venture

In a strategic step to more effectively serve the needs of theemerging digital cinema industry, Thomson, the worldwide leader invideo technologies, products and services and QUALCOMM Incorporatedtoday announced that QUALCOMM has sold its equity interest inTechnicolor Digital Cinema (TDC) to Thomson, the parent company ofTechnicolor, a move that results in sole Thomson ownership of theventure. Financial terms of the sale were not disclosed.

The agreement allows both entities to leverage Technicolor DigitalCinema’s successful systems and service model while enabling eachto focus on their respective core businesses--Technicolor in servicingthe digital cinema needs of its customers and QUALCOMM in developingand producing innovative digital cinema technology and systems. Thetransaction is also consistent with Thomson’s commitment tosupport content owners and network operators globally as they evaluateand embrace digital technologies.

“Many of the objectives of forming the joint venture companyin 2000 have been met,” said Gary Garland, Vice President andGeneral Manager of the QUALCOMM Digital Media Division. “With thecombination of Technicolor’s service legacy to the entertainmentindustry and QUALCOMM’S technical expertise in digital cinemaenabling technologies, we hoped to move digital cinema forward byproviding both systems and services specific to the digital cinemaspace. We have done that, and we’ve done it exceptionallywell.”

As part of the restructuring, Technicolor will acquire exclusiverights to manufacture, sell and service the multi-screen TheatreManagement System (TMS) designed by QUALCOMM under the TechnicolorDigital Cinema umbrella. In turn, QUALCOMM will continue to develop andmarket core digital cinema products and technologies, including decodermodules, encoders and conditional access systems (CAS) that are basedon its ABSoluteä compression and decryption technology.

“This is a positive move that provides customers the freedomto independently select a service provider and a technologyarchitecture that best fits their needs,” said Dave Elliott,President of Technicolor Entertainment Services and Chief ExecutiveOfficer of Technicolor Digital Cinema. “Our intent has alwaysbeen to offer the industry options. By restructuring the joint venture,we expand customer choice while at the same time restoringTechnicolor’s legacy to serve multiple architectures andenhancing QUALCOMM’s ability to market their advanced digitalcinema technologies.”

Technicolor and QUALCOMM will continue to work closely together asQUALCOMM digital cinema technologies and products emerge, includingABSolute image compression technology and advanced securityarchitecture as well as QUALCOMM’s digital cinema decodermodules, encoder systems, and conditional access equipment for theindustry. Technicolor Digital Cinema will continue to provide andsupport these technologies and products, but will also offer othertechnologies to meet industry demand and requirements.

Since launching in 2000, Technicolor Digital Cinema has evolved tooffer the industry’s most comprehensive set of digital cinemaservices and solutions, including compression, encryption,distribution, storage, and scheduling/playback as well as in-theatremanagement systems, maintenance and support. Technicolor Digital Cinemahas installed and maintained digital cinema delivery technology andequipment through QUALCOMM-designed Auditorium Management Systems innearly 40 theatres worldwide for first-run showings of digital movies.To date, Technicolor Digital Cinema has processed, packaged, deliveredand downloaded 42 motion picture titles for a total of more than 50,000showings to commercial audiences, including four titles that werereleased using the world’s first end-to-end encryption approach,provided by QUALCOMM’s technology. Recent encrypted digitalcinema releases include Finding Nemo, Pirates of theCaribbean, X Men 2, and Spy Kids 3.

Thomson and Technicolor Digital Cinema will continue to work withcontent owners toward advancing the digital cinema evolution bydeveloping robust systems, support services and industry standards inanticipation of the widespread adoption of this new medium. QUALCOMMwill continue to develop and provide advanced digital cinematechnologies and products to meet industry requirements on anopen-systems basis to OEM’s, service providers and end-users.

About Thomson
Thomson provides a wide range of video (and enabling) technologies,systems, finished products and services to consumers and professionalsin the entertainment and media industries. To advance and enable thedigital media transition, Thomson has four principal divisions: Contentand Networks, Consumer Products, Components, and Licensing. The companydistributes its products under the Technicolor, Grass Valley, THOMSONand RCA brand names. For more information: www.thomson.net.

Technicolor Entertainment Services (TES), part of Thomson's Contentand Networks division, is the number one processor of motion picturefilm worldwide and a leading provider of creative/post-production,cinema distribution and digital cinema services. With facilitiesworldwide, TES service lines include:
·Technicolor Release Print Services processes and prints16/35/65/70 mm formats, dailies, answer prints, intermediates, andtrailers.
·Technicolor Creative Services provides production,post-production and post post-production services ranging from film andaudio restoration and preservation, in both analog and digital formats,to DVD compression and authoring, VOD encoding, to episodic televisionand commercial advertising completion.
·Technicolor Cinema Distribution Services provides high-qualitydistribution and logistics management services for motion picturerelease prints and advertising collateral through state-of-the-arttechnologies and an efficient distribution pipeline.

About QUALCOMM
QUALCOMM Incorporated (www.qualcomm.com) is a leader indeveloping and delivering innovative digital wireless communicationsproducts and services based on the Company's CDMA digital technology.Headquartered in San Diego, Calif., QUALCOMM is included in the S&P500 Index and is a 2003 FORTUNE 500 company traded on The Nasdaq StockMarket under the ticker symbol QCOM.