FREMONT, Calif.- March 7, 2003 - Vialta, Inc. (OTC Bulletin Board: VLTA) today reported a net loss of $13.4 million, or $0.16 per share, for the fourth quarter ended December 31, 2002. This compares to a net loss of $12.6 million, or $0.15 per share, for the comparable prior-year quarter, and a net loss of $14.8 million, or $0.18 per share for the third quarter of 2002. In addition, the Company reported a net loss of $42.6 million, or $0.51 per share, for the 12 months ended December 31, 2002, compared to a net loss of $35.9 million, or $0.83 per share, for the 12 months ended December 31, 2001.

In accordance with generally accepted accounting principles, the Company could not recognize revenue on sales of its new videophone product, Beamer? during the year ended December 31, 2002, because the warranty period for the first significant Beamer shipments did not end until after December 31, 2002. The Company recorded $3.2 million of deferred revenue on sales of Beamer as of December 31, 2002, the majority of which is expected to be recognized during the quarter ending March 31, 2003.

The net loss for the fourth quarter of 2002 included charges of $8.3 million related to the write-down of content licenses previously capitalized in connection with ViMagazine, and approximately $900,000 in costs associated with Vialta's previously disclosed wind-down of its internet service operations and related closure of Vialta's Canadian office. Excluding these charges, the net loss would have been $4.2 million, or $0.05 per share, for the fourth quarter of 2002.

The net loss for the year ended December 31, 2002, also included $10.4 million in product costs related to the Company's nationwide launch of Beamer. Because Beamer is a new product, the Company expensed inventory costs through the third quarter of 2002. Following Beamer's nationwide launch, Vialta began capitalizing its inventory costs in the fourth quarter of 2002. As of December 31, 2002, the Company's net inventory balance was $2.8 million. The Company believes its inventory levels as of the end of 2002 will be sufficient to support its anticipated distribution commitments through the first half of 2003.

During 2002, the Company continued its efforts to reduce its operating expenses. As a result, the Company's operating expenses for 2002 were significantly lower than for 2001. Research and development expense for the 12 months ended December 31, 2002 decreased $12.0 million, from $25.3 million to $13.3 million. The Company's general and administrative expense for 2002 decreased by $3.7 million, from $9.3 million to $5.6 million. Sales and marketing expense for the 12 months ended December 31, 2002 was $3.1 million, compared to $3.7 million for the prior year.

Didier Pietri, Vialta's president and chief executive officer, said, "2002 was marked by positive initial market acceptance of our newly launched Beamer. Since our national product launch in August 2002, retail distribution grew to almost 800 locations, including Best Buy and Sharper Image on a national level, and many leading regional chains such as Fry's and Good Guys. In addition, Beamer won two prestigious awards - a 2003 "Good Buy" award from Good Housekeeping magazine which recognizes innovative, affordable solutions for consumers, plus, a 2003 "Best of Innovations" award from the International Consumer Electronics Show."

Pietri continued, "Beamer's high visibility launch, along with its acceptance by retailers and consumers, affirms Vialta's belief that there is an opportunity for entrepreneurial companies to create products that seamlessly integrate design and function to deliver tangible benefits and value to consumers."

Forward-Looking Statements