Press Release

    SUNNYVALE, Calif.--(BUSINESS WIRE)--July 26, 2006--

    DiviCom(R) Electra(TM) 7000 Encoder Delivers Outstanding Video
     Quality at Ultra-Low Bit-Rates; Provides Unparalleled Density
                            and Flexibility

Harmonic Inc. (NASDAQ:HLIT) today extended its family of market-leading digital video compression solutions with the new DiviCom(R) Electra(TM) 7000 high definition (HD) MPEG-4 AVC (H.264) encoder. The world's first multi-channel, multi-service HD H.264 encoder, the Electra 7000 supports up to four full resolution HD channels and can simultaneously create low resolution services for picture-in-picture (PiP) or multi-channel mosaic applications. An ideal solution for satellite, telco/IPTV and cable operators, the Electra 7000 sets a radically improved benchmark for HD H.264 compression performance and video quality. Customers have confirmed bit-rates 20 to 30 percent lower than any currently deployed HD H.264 encoder, and the system has already been selected by five satellite and telco operators in North America and Europe to power their forthcoming HD services.

The ground-breaking Electra 7000 addresses the challenge shared by all operators regarding how to minimize bit-rates while providing superior video quality as they expand their service portfolios to include additional HD programming, video-on-demand, personal video recorders (PVR), network PVR and other applications. Satellite operators can utilize the Electra 7000 to enhance the channel line-up by delivering substantially more national and local HD channels while improving picture quality. The Electra 7000 also revolutionizes the video-over-DSL business model by enabling telcos to provide outstanding HD and standard definition (SD) services with support for multiple televisions and PVR functionality in addition to making bandwidth available for competitive high-speed Internet access.

"Service providers no longer have to accept compromises on video quality or resolution for their HD services as they seek a solution that delivers on the promise of H.264," said Patrick Harshman, President and CEO of Harmonic Inc. "The DiviCom Electra 7000 leapfrogs the industry estimates for bit-rate improvement possible with H.264 and facilitates the widespread expansion of HD in the near future. With this next-generation system, Harmonic is building upon a longstanding tradition of excellence and technology innovation with the DiviCom encoders and taking HD compression to a whole new level."

The Electra 7000's compression engine is based on a new, innovative architecture that utilizes single slice video processing and other sophisticated tools including advanced video pre-processing and full multi-pass LookAhead(TM) encoding. The encoder supports constant bit-rate (CBR) or variable bit-rate (VBR) encoding for all resolutions in 1080i and 720p formats, as well as native 5.1/7.1 audio encoding. In addition, it includes native IP outputs and can be seamlessly incorporated into Harmonic's industry-leading DiviTrackIP(TM) distributed statistical multiplexing solution, further improving bandwidth efficiency.

The density provided by Electra's modular one rack unit (RU) platform reduces capital and operating expenditures, conserving valuable rack space and reducing power consumption in comparison with existing 1RU or 2RU systems supporting only one HD H.264 service. Operators can easily scale from one to four channels per encoder as demand for HD programming continues to grow. The Electra's multi-service capabilities also increase versatility by enabling service providers to deliver video to a range of devices and to support a variety of new applications including PiP, interactive program guides and multi-channel mosaics.

Used as part of an end-to-end video acquisition and delivery solution, the Electra 7000 is fully integrated with Harmonic's ProView(TM) receivers/decoders, DiviTrackIP statistical multiplexer, CLEARcut(TM) storage encoding system and ProStream(TM) 1000 stream processing platform. Configuration, management and monitoring of the HD services are made simple with the intuitive and user-friendly NMX Digital Service Manager(TM).

The DiviCom Electra 7000 multi-service encoding platform will be featured at IBC 2006, September 8-12 in Amsterdam, The Netherlands in Harmonic's booth #1.361. First customer shipments are scheduled to begin in September.

About Harmonic Inc.

Harmonic Inc. is a leading provider of digital video, broadband optical networking and IP delivery systems to cable, satellite, telecom and broadcast network operators. Harmonic's open standards-based solutions for the headend through the last mile enable customers to develop new revenue sources and a competitive advantage by offering powerful interactive video, voice and data services such as video-on-demand, high definition digital television, telephony and Internet access.

Harmonic (NASDAQ:HLIT) is headquartered in Sunnyvale, California with R&D, sales and system integration centers worldwide. The Company's customers, including many of the world's largest communications providers, deliver services in virtually every country. Visit www.harmonicinc.com for more information.

This press release contains forward-looking statements within the meaning of Section 27(A) of the Securities Act of 1933 and Section 21(E) of the Securities Exchange Act of 1934, including statements related to: revolutionizing the video-over-DSL business model, the widespread expansion of HD in the near future, demand for HD programming continuing to grow, and the first customer shipments being scheduled to begin in September.

Our expectations and beliefs regarding these matters and the features and anticipated benefits of the Electra 7000 encoder may not materialize, and actual results could differ materially from those projected. The forward-looking statements contained in this press release are also subject to other risks and uncertainties, including those more fully described in Harmonic's filings with the Securities and Exchange Commission including its recent Reports filed on Form 10-K and Form 10-Q. Harmonic does not undertake to update any forward-looking statements.

Editor's Note: Product and company names used herein are trademarks or registered trademarks of their respective owners.

    CONTACT: Harmonic
             Sarah Lum, 408-543-2392 (Media Relations)
             sarah.lum@harmonicinc.com
             or
             StreetConnect
             Michael Newman, 408-542-2760 (Investor Relations)
             hlit@stct.com

    SOURCE: Harmonic