Survey Says 13.5 Million Americans Considering MP3 Player Purchase By Mid-2005

Conducted during Thanksgiving week, the traditional kick-off to the holiday shopping season, the nationwide survey found that 59 percent of would-be buyers plan to give MP3 players as gifts. The survey was fielded by independent research firm StrategyOne on behalf of SigmaTel.

"In the U.S., the portable MP3 player category has expanded far beyond early adopters. A compelling selection of device form factors, storage capacities, price points and compatible online music services has driven this expansion," said Susan Kevorkian, senior analyst with IDC. "Younger consumers have been on the cutting edge of this trend, which is only gaining momentum during this holiday season."

From storage capacity to ease-of-use and price, consumers take many factors into consideration when choosing to buy a player. Twenty-nine percent of respondents cited price as the leading attribute they would consider in making a purchasing decision, with 39 percent stating they would be willing to spend up to $100 and 24 percent would be willing to spend up to $150.

However, among those respondents who already own an MP3 player, 31 percent said they would be willing to spend $150 to $249 for a player with increased storage capacity. This seems to indicate that owners value added storage capacity and are willing to pay a higher premium for it.

"If consumer intentions are any indication, the MP3 market has moved beyond its infancy stage and is poised for significant growth," said Ron Edgerton, president and chief executive officer of SigmaTel. "SigmaTel understands this, and will continue to engage consumers to better understand their lifestyles and the driving forces behind their purchasing behavior to help us better develop the technology that will meet their needs."

Among other consumer insights, the survey revealed that, surprisingly, brand lagged behind price and storage capacity with just nine percent of respondents citing it as their main decision influencer.

When asked why they would consider buying an MP3 player, 63 percent of would-be buyers cited new music download services and 69 percent cited audio quality.

"This survey clearly shows us that consumers have embraced this technology and the wide range of MP3 players available to suit every budget and lifestyle," noted Edgerton.

For more information on SigmaTel products, as well as development information and sales support please visit www.sigmatel.com. To obtain a copy of this survey, please contact SigmaTel public relations.

About SigmaTel:

SigmaTel, Inc., a fabless semiconductor company headquartered in Austin, Texas, designs, develops, and markets proprietary, analog intensive, mixed-signal ICs for a variety of products in the consumer electronics and computing markets, including portable compressed audio players, such as MP3 players, notebook and desktop PCs, DVD players, digital televisions, and set-top boxes. SigmaTel provides complete, system-level solutions that include highly-integrated ICs, customizable firmware and software, software development tools, reference designs, and applications support. The Company's focus is on providing system-level solutions that enable customers to rapidly introduce and offer electronic products that are small, light-weight, power-efficient, reliable, and cost-effective. SigmaTel is ISO 9001:2000 certified and is committed to providing customers with high performance, quality products along with superior customer service.

Cautionary Language:

This press release contains forward-looking statements based on current SigmaTel expectations. The words "expect," "will," "should," "would," "anticipate," "project," "outlook," "believe," "intend," and similar phrases as they relate to SigmaTel or future events are intended to identify such forward-looking statements. These forward-looking statements reflect the current views and assumptions of SigmaTel, but are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. A number of important factors could cause actual results to differ materially from those in the forward-looking statements, and there will be events in the future that SigmaTel is not able to accurately predict or control. For a discussion of factors that could impact SigmaTel's financial results and cause actual results to differ materially from those in the forward-looking statements, please refer to recent SigmaTel filings with the SEC, particularly the 424(b)(4) final prospectuses filed September 19, 2003 and February 19, 2004, the Form 10-Qs that were filed on October 29, 2003, April 20, 2004, July 20, 2004, and October 19, 2004, and the Form 10-K that was filed on February 17, 2004.

About the Survey:

A nationwide telephone survey was conducted by StrategyOne from November 19-29, 2004, of 656 American consumers between 18 and 35 years of age. The margin-of-error for this survey is +/-3.8 percentage points at the 95 percent confidence level.

The survey was conducted utilizing a Random-Digit-Dialing (RDD) methodology to help ensure that every American household with a telephone had an equal chance of being contacted. The data collection was performed at a Computer-Assisted Telephone Interviewing (CATI) Center and the results were analyzed by StrategyOne in its Washington D.C. office. StrategyOne is a national, full-service public opinion research and strategic communications agency with offices in Washington D.C., New York City, and Chicago, Illinois.

SigmaTel is a registered trademark of SigmaTel. All other products and brand names as they appear in this release are trademarks or registered trademarks of their respective holders. All specifications may be changed without notice.