09.17.2003
D&M Holdings steadily advances strategy to become the leader in the premium home entertainment market. Digital Networks North America plays key role in implementing the D&M strategy through its advanced digital network technology and products.

TOKYO - September 17, 2003--D&M Holdings Inc. (D&M, TSE#6735), parent company of Denon Ltd., Marantz Japan, Inc., McIntosh Laboratory, Inc. and Digital Networks North America (DNNA), held a press conference on September 16 in Tokyo with DNNA Chairman Michael Seedman, who discussed the company's business strategy.

"DNNA will drive the strategy and develop the core technologies that will enable the brands within D&M Holdings to become the leaders in the home networking market," said Michael Seedman. "Regarding the Japanese market, we will focus on Rio in the near term," he said.

Said Merle Gilmore, Chairman of D&M: "D&M is helping create the digital lifestyle. The brands and digital technologies within DNNA will play key roles in achieving this goal."

D&M Strategy

D&M's business strategies are to:

1. Acquire leading premium AV brands. Earlier this year, D&M acquired McIntosh Laboratory ,Inc.,a ultra premium brand in home entertainment systems.
2. Create a single industrial operation to achieve scale. To date, the post merger integration initiatives (PMI) are progressing globally.
3. Develop core technology (software). D&M has invested in Mediabolic, a San Francisco-based software company, and acquired the Rio, ReplayTV and Escient brands.
4. Strengthen relationships with AV specialty store and custom installers. To date, D&M has been focusing on area-based AV specialty stores in the US.
5. Divestiture of non-core business.. D&M has completed the sale of three non-core businesses.
6. Improve customer service. Improvement on after-service (operations) is in process.

DNNA(Digital Networks North America) Mission and Strategy

- lead the networked home entertainment market and development of core digital technology for all brands within D&M

DNNA's mission is to establish a North American center of excellence within D&M for networked home entertainment. Its strategies are the following:

1. Establish leadership in network technology and network product development. Develop a strong intellectual property portfolio.
2. Emphasize digital / network product customer support across all D&M brands and give this strategy the same priority as product development.
3. Drive the introduction of the network technology into D&M brands.

DNNA Brand Strategy

(1) Rio

- Digital / Network Role

Rio represents the portable extension of home entertainment through personal experience -- within and beyond the home (auto, plane, sports). Its product category is the MP3 portable player that targets the is13-35-year-old market. Its core strengths include device design and styling and high volume design and sales.

- Marketing Strategy

Rio's value proposition is the introduction of many different and unique industrial designs incorporated with the latest technologies and intuitive software. By launching multiple new products of flash MP3 players and flash & HDD MP3 players, Rio's goal is to achieve #1 share in the US flash MP3 player market by the end of Q3 in FY2003, and #3 share in the US HDD MP3 player market by the end of Q4 in FY2003.

(2) Replay TV

- Digital / Network Role

ReplayTV represents the D&M mass-market and big-box retail entry point for PVR (Personal Video Recorder) and STB (Set Top Box) technology. Its product category is PVR, targeting early adopters and techno-savvies. Its core strengths include end-to-end PVR solution, system and application software expertise, network operations infrastructure and PVR patent portfolio.

- Marketing Strategy

ReplayTV's value proposition is to target two different market segments -- lower cost and easy to use and better performance. For the two different markets, ReplayTV puts high-end HD STB/PPV (Pay Per View) with installer / high-end demographic supports price point and feature set, and ultra low-end broadcast PVR with basic functionality ideal for general broadcast programming (non-copyright protected).

(3) Escient

- Digital / Network Role

Escient represents the custom installer's choice for "IT Grade Premium" installed AV and home automation products. It is also responsible for network interoperability platform development and transfer within D&M. Its core strengths include network interface technology and backend service provision (EPG, discography, content clearing house, etc.).

- Marketing Strategy

Escient uses the new DVD management product as leverage to pull sales of the DVD manager and Fireball Digital Music Managers, with focus on the ease of use and the polish of the user interface. In addition, it also improves partnerships with premier home automation companies and premium retailers.

DNNA Japan Strategy

Enhance DNNA's presence primarily with Rio products. Rio intends to lead the MP3 market by adding new and innovative HDD players and maintain the current #1 position in flash category in Japan to establish impregnable position in all WMA/MP3 player market in the upcoming holiday season. Rio cooperates with TDK Marketing (TMK) as the distribution channel to leverage its widespread retailer connection (covering full range of channels, PC shops to CE mega stores).

About Digital Networks North America (DNNA)

Digital Networks North America, Inc. (DNNA) is a wholly owned subsidiary of D& M Holdings U.S, Inc. DNNA is home to the ReplayTV, Rio and Escient branded products, representing the best in digital entertainment devices. DNNA is developing and building network connected entertainment products. The core technologies developed at DNNA will be introduced across the D&M Holdings line of products in the advanced home theater and home networked markets. D&M Holdings Inc., parent to D&M Holdings U.S., Inc., is a global, publicly traded company on the Tokyo Stock Exchange. (TSE II: 6735). D&M Holdings brands include Denon, Marantz and McIntosh Laboratory -- all industry leaders in the specialist home theater, audio/video consumer electronics and professional audio markets.

About D&M Holdings Inc.
D&M Holdings Inc. (TSE II: 6735) is based in Tokyo and is the parent company of wholly owned subsidiaries Denon Ltd., Marantz Japan, Inc. and McIntosh Laboratory, Inc. Denon, Marantz and McIntosh are global industry leaders in the specialist home theater, audio/video consumer electronics and professional audio markets, with a strong and long-standing heritage of manufacturing and marketing high-performance audio and video components. A wholly owned subsidiary of D&M Holdings U.S., Inc., Digital Networks North America, Inc. (DNNA), owns the ReplayTV®, Rio® and Escient brands---all representing award-winning technologies in digital home entertainment. Additional information is available at http://www.dm-holdings.com/.

Statements in this news release regarding D&M Holdings, Inc. that are not statements of historical fact may include forward looking statements regarding future events or the future financial performance of the company. We wish to caution you that such statements are just predictions and that actual events or results may differ materially. Forward looking statements involve a number of risks and uncertainties surrounding the integration of the company's acquisitions, competitive and industry conditions, targeted cost savings programs, market acceptance for the company's products, technological changes, developing industry standards and other factors related to the company's businesses.