Panasonic Selects ScanSoft's Dragon NaturallySpeaking for New Line of Personal Voice Recorders

Agreement Pairs Leading Panasonic Voice Recorder and ScanSoft Speech Recognition Technologies to Increase Productivity of People on the Move

PEABODY, Mass., and OSAKA, Japan, May 15, 2002 - ScanSoft, Inc. (Nasdaq: SSFT), a leading supplier of imaging, speech and language solutions, today announced that Panasonic has selected ScanSoft's Dragon NaturallySpeaking as the speech recognition software to be included with its new line of digital voice recorders.

Designed to meet demands for productivity and convenience by users at work, at home or on the road, the combination of high-quality Panasonic voice recorders and ScanSoft's Dragon NaturallySpeaking v. 5.0 software offers a valuable solution to convert recorded files into text. Using the new Panasonic digital recorder, users can dictate documents and notes while away from a computer, and then easily download their voice files for automatic transcription into text files through the ScanSoft's award-winning speech recognition software.

The Panasonic/ScanSoft solution will be offered through U.S. and European distributors and retailers. In the United States, the Panasonic recorders will be offered with the World English edition of Dragon NaturallySpeaking v. 5.0, and, in Europe, customers will have six language options, including World English, Dutch, French, German, Italian and Spanish.

"Our customers rely on Panasonic to provide innovative solutions and maintain high quality standards", said Mr. Naoto Noguchi, Director, Personal AV Business Unit, AVC Company, Matsushita Electric Industrial Co., Ltd. ("Panasonic"). "Through ScanSoft's Dragon NaturallySpeaking software, we are able to offer busy, on-the-go users a unique productivity-boosting tool that links a voice recorder and personal computer."

"We are pleased to be chosen by Panasonic to supply speech recognition software solutions for use with its digital voice recorders," said Wayne Crandall, senior vice president of sales and business development at ScanSoft. "We look forward to working with Panasonic to bring new levels of productivity and convenience to personal computer users worldwide."

About Matsushita Electric Industrial

Matsushita Electric Industrial Co., Ltd., best known for its Panasonic brand, is a worldwide leader in the development and manufacture of electronics products for a wide range of consumer, business, and industrial needs. Based in Osaka, Japan, the company recorded consolidated sales of 6,876.7 billion yen (US$51.70 billion) for the fiscal year ended March 31, 2002. In addition to the Tokyo and other Japanese stock exchanges (6752), Matsushita's shares are listed on the Amsterdam, Dusseldorf, Frankfurt, New York, Pacific (NYSE/PCX: MC), and Paris stock exchanges. For more information, visit the Matsushita web site at http://www.panasonic.co.jp/global/top.html.

About ScanSoft

ScanSoft, Inc. is the leading supplier of imaging, speech and language solutions that are used to automate a wide range of manual processes - saving time, increasing worker productivity and improving customer service. For more information regarding ScanSoft products and technologies, please visit www.ScanSoft.com.

ScanSoft, Dragon and NaturallySpeaking are registered trademarks or trademarks of ScanSoft, Inc. in the United States and other countries. All other company or product names mentioned herein may be trademarks of their respective owners.

The statements in this press release that relate to future plans, events or performances are forward-looking statements that involve risks and uncertainties, including risks associated with market trends, competitive factors, and other risks identified in the Company's SEC filings. Actual results, event and performance may differ materially. Readers are cautioned not to put undue reliance on these forward-looking statements that speak only as of the date hereof.

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