/
`
`DEICII Shareholder:
`
`Your company is now CompuSonics Cor(cid:173)
`paration as a result 01 a shareholdervote at the
`annual meellng last Thur.;day. The name
`change Irom CompuSound.lnc. was necessary
`to avoid conlJlct over trademark rights. A
`"clean" trademark IS 01 ever increasing im(cid:173)
`portance as our products begin penetrating
`the audio markel. And now. the news!
`CompUSonics' press conference in New
`York Ctty on May II was attended by over 50
`reporter.; and joumalists lrom the audio trade
`press. Our equipment scored two "world's brsts"
`in one day when the DSP-2004 Prolessional
`Dlgllal MIXer/Recorder was demonstrated
`with a live duet. and the OSP-I 000 Home DIgital
`Disk Recorder was displayed. The press response
`was highly lavorable to our marrtage 01 micro(cid:173)
`computer and audio technologies that opens
`the door 10 a new generation 01 products lor
`home and prolessional use.
`
`T hree weeks later our team was in Chi(cid:173)
`
`7/16/84
`
`Testing 01 the Telerecordmg system WIth
`CMI Labs began last week II Ihe syslem con·
`tinues to meet Us specs. the hr.;1 AT&T Bell Lab
`test in New Jersey will happen late thts monlh
`A successful lest 01 the digItal transmission 01
`high IIdellty music over telephone Imes WIll be
`lollowed by a jOint press conlerence 01
`CompuSonics. CMI Labs and AT&T. heraldmg
`the dawn 01 a new era in the musIc industry In
`the not too distant IUture consumer.; WIll be
`able to purchase digital recordings 01 theIr
`lavorite artists directly Irom the production
`studlo's dinl-up data base and record them on
`blank SuperFIoppies in a DSp·I 000
`A malor breakthrough In our product de·
`velopment program occurred recently. when
`the United States Patent Ollice allowed all
`claims made by mysell on behall 01 the
`CompUSonics recording syslem. A second US
`patent application has been tiled. and the
`lorelgn applicatiOns are still pending. Copy(cid:173)
`rights are being applied to every bit 01 system
`softWare. We believe the patent and copynght
`coverage is strong enough to begm disclosure
`01 the basic englneenng m a senes 01 technical
`paper.;. The lir.;t 01 these are plaMed lor
`presentation at the Audio Engineering Society
`convention in New Yor~ City on October 8th
`On the business development Ironl.
`negotiations are under way on distribution and
`licensing deals. both loreign and domestic It
`appears that the IIrsl lorelgn dlstrlbullon
`agreement to go beyond the verbal stage will
`be lor the Italian market through Mcintosh
`Labs 01 Italy. They are sponsoring a tnp 10
`Milano so that we can demonstrate the DSP·
`1000 at the aMual electroOlcs show there m
`Seplember. A Japanese company has made a
`similar arrangement. Including a tnp to Tokyo
`in October. I must emphaSIze that these are
`informal deals al this POint and that nothing
`deliniltve can be reported. yel.
`
`C ompuSomcs is also on Ihe warpath lor
`
`more linancial backing ThIS may take
`the lorm 01 a jomt venture. secondary
`stock ollering. limited partner.;hlp. or some
`more creative vehicle AI thiS pomtthere's nol
`much I can wnte about. except. to say that by
`the end 01 September a deal should be hrmed
`up. For the time bemg we'll plan to operate
`based on revenues Irom the DSP·2000s
`Those 01 you who would like delalled
`Information about your company's producls
`may call or drop me a note We appreciate Ihe
`interest.
`
`Sincerely.
`
`cago's McCormick Place lor the June
`Consumer Electronics Show. We were
`literally innundated WIth retailer.;. distributors.
`press. Japanese. and other exhibitor.;. Demon(cid:173)
`strations 01 the DSP· 2004 never lalled to draw a
`crowd. CompUSonics' DSP-looo was selected
`as one 01 1984's "Most IMovatlVe Consumer
`Electronics Products" by a panel 01 expert
`judges and put on display in a special exhibit.
`This roomlUll 01 high-tech audio/video gear
`was chosen Irom thousands 01 products.
`Among names like RCA Panasonic. and GE.
`CompUSonics was certainly the smallest. and
`appeared to be the only· new company with a
`new product To be selected at our 11m CES was
`quite an honor
`All 01 the attention resulted in extensive
`media coverge. To name a lew: "BUSiness
`Week". "US News & World Report". "USA
`Today". "lnioWorld". "Consumer Electronics"
`and "High Fidelity" Many lecture magazine
`stones are in the preparation stage lor publi(cid:173)
`cation in the commg months. Our target mar(cid:173)
`kets lor the DSp·1 000 will be very aware 01 the
`company. Its technology and products by the
`lime the lir.;t machines are in the stores in 1985.
`On the assumption that CompuSomcs will seU(cid:173)
`manulacture. a two phase marketing plan has
`been prepared that proJects sales 01 10.000
`units m the lir.;t 12 months The advertlSmg push
`to achieve this goal would typlcalty cost in
`excess 01 S I million Consldenng the hot re(cid:173)
`action at the CES. it may not take that much to
`launch the 1000.
`WUh regard to sales 01 our br.;t DSP-2000s.
`beta test sUe deliveries will be as plaMed. this
`month. lithe units are acceptable. the test sUes
`....... n~
`will probably buy them. Since our Imt ads lor
`zlnes this month. the response has been over I
`Ihese machines appeared m pro audio maga- "..
`
`1000 Inquiries. We anticipate being able to
`deliver in quantity by November.
`
`David M. Schwartz
`Pres1den!
`
`CDN026260
`
`Apple Exhibit 1026 Page 00001