Investor Contacts: Gerald Tucciarone
Chief Financial Officer
631/434-1600 extension 306


            HAUPPAUGE DIGITAL REPORTS FISCAL 2004 SECOND QUARTER AND
                          SIX MONTH FINANCIAL RESULTS
  ---------------------------------------------------------------------------

Net sales increases  approximately 21% and 19% for quarter and six month period.
Net income, including the cost of arbitration and litigation charges,  increases
approximately   109%   and  68%   for  the   quarter   and  six   month   period
--------------------------------------------------------------------------------
-------------------------------------------------------------
HAUPPAUGE, NY - May 13, 2004 - Hauppauge Digital, Inc. (NASDAQ: HAUP), a leading
developer of digital video TV and data broadcast  receiver products for personal
computers,  today reported  financial  results for the fiscal second quarter and
six month  period ended March 31, 2004.

SECOND  QUARTER  RESULTS
Net sales were $16.8  million for the second  quarter  compared to $13.9 million
for the  previous  year's  second  quarter,  an increase of  approximately  21%.
Increases in OEM and retail sales of our WinTV-PVR products, European digital TV
receiver  products,  the  increase  in sales of  retail  TV  tuners  for  laptop
computers  plus the increase in the Euro exchange  rate were the primary  forces
responsible for the sales increase.

Gross profit  percentage  increased to 29.34% for the second  quarter,  compared
with a gross profit percentage of 24.21% for the previous year's second quarter.
Product cost  reductions,  a favorable sales mix of higher gross margin products
and the  increase  in the Euro  exchange  rate were mainly  responsible  for the
increases.

Selling,   General  and   Administrative   costs  increased  by  $499,297.   The
strengthening  of the value of the Euro to the U.S.  dollar was  responsible for
$190,677 of the  increase,  while  increases in sales  related  promotional  and
marketing  programs plus increased legal and consulting costs contributed to the
remaining  increase in SGA  expenses.  Spending  for  research  and  development
decreased   $3,861,   mainly  due  to  lower  contracted  third  party  software
development costs.

Net income for the quarter increased  approximately 109% over last year's second
quarter to $544,390 from $260,515. Net income per share was $0.06 on a basic and
diluted  basis  compared to net income per share of $0.03 on a basic and diluted
basis for the prior year's second  quarter.  The results for the quarter include
$706,250 in  arbitration  and litigation  charges,  which reduced net income per
share by $0.07 on a basic and diluted basis.


<PAGE>

SIX MONTH RESULTS
Net sales were $35.0  million  for the six month  period  ended  March 31,  2004
compared to $29.4 million for the previous  year,  an increase of  approximately
19%.  Increases  in  OEM  and  retail  sales  of  our  WinTV-PVR  products,  the
introduction  of the  MediaMVP,  European  digital  TV  receiver  products,  the
increase in sales of retail TV tuners for laptop  computers  and the increase in
the Euro exchange rate were primary forces responsible for the sales increases.

Gross profit percentage  increased to 27.15% for the six month period,  compared
with a gross profit  percentage  of 24.76% for the previous  year.  Product cost
reductions,  a  favorable  sales mix of higher  gross  margin  products  and the
increase in the Euro exchange rate were mainly responsible for the increases.

Selling,   General  and   Administrative   costs  increased  by  $913,611.   The
strengthening  of the value of the Euro to the U.S.  dollar was  responsible for
$401,834 of the  increase,  while  increases in sales  related  promotional  and
marketing  programs plus increased legal and consulting costs contributed to the
remaining  increase in SGA  expenses.  Spending  for  research  and  development
decreased  $86,660,   mainly  due  to  lower  contracted  third  party  software
development costs and lower compensation costs.

Net income for the six month period increased  approximately  68% over last year
to $1,537,250  from  $916,987.  Basic net income per share was $0.17 and diluted
net income per share was $0.16,  compared  to net income per share of $0.10 on a
basic and  diluted  basis  for the prior  year.  The six month  results  include
$706,250 in  arbitration  and  litigation  charges,  which reduced net income by
$0.07 per share on a diluted basis.

DISCUSSION OF RESULTS
Ken Plotkin,  Hauppauge's Chief Executive Officer,  stated, "The continued sales
growth of our  internal  and external  personal  video  recorders to the OEM and
retail  market,  sales growth of European  digital TV receivers  and external TV
tuner devices,  coupled with the strengthening of the Euro,  impacted positively
on our gross profit and net income.  Also in this quarter we concluded two legal
proceedings, including the arbitration case with the estate of Kenneth Aupperle,
one of the Company's  original founders and former  President.  Although the non
recurring  arbitration and litigation expenses that resulted from the conclusion
of these legal proceedings reduced our net income by about $706,000 and caused a
$0.07  decrease  in our  diluted  net  income  per  share,  we  have  put  these
proceedings  behind us and can now  commit  more our  energies  on  growing  the
business."

ABOUT HAUPPAUGE DIGITAL
-----------------------

     Hauppauge  Digital,  Inc. is a leading  developer  of analog and digital TV
receiver  products  for the  personal  computer  market.  Through its  Hauppauge
Computer Works, Inc. and Hauppauge Digital Europe Sarl subsidiaries, the

<PAGE>

Company designs and develops analog and digital TV receivers that allow PC users
to watch  television  on their PC screen in a  resizable  window  and enable the
recording of TV shows to a hard disk, digital video editing, video conferencing,
receiving of digital TV  transmissions,  and the display of digital media stored
on a computer to a TV set via a home network.  The Company is  headquartered  in
Hauppauge, New York, with administrative offices in New York, Singapore, Ireland
and Luxembourg and sales offices in Germany,  London,  Paris,  The  Netherlands,
Sweden, Italy, Spain, Singapore and California.  The Company's Internet web site
can be found at http://www.hauppauge.com.


--------------------------------------------------------------------------------
     Certain statements in this Release constitute "forward-looking  statements"
     within the meaning of the Private Securities Litigation Reform Act of 1995.
     Such   forward-looking   statements   involve  known  and  unknown   risks,
     uncertainties  and  other  factors  which may  cause  the  actual  results,
     performance or  achievements  of the Company,  or industry  results,  to be
     materially  different from any future results,  performance or achievements
     expressed  or  implied by such  forward-looking  statements.  Such  factors
     include,  among other things, those described in the Company's filings with
     the Securities and Exchange Commission,  including, but not limited to, the
     Company's  Annual  Report on form 10-K for the fiscal year ended  September
     30, 2003.
--------------------------------------------------------------------------------


                           [ Financial Table Follows ]

<PAGE>


                    HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)


                                                   Three months ended March  31,
                                                   -----------------------------
                                                        2004             2003
                                                   -----------------------------

Net Sales                                           $16,804,283      $13,918,858
Cost  of Sales                                       11,873,313       10,549,386
                                                    -----------      -----------
 Gross Profit                                         4,930,970        3,369,472

Selling, General and  Administrative Expenses         3,223,769        2,724,472
Research & Development Expenses                         444,390          448,251

 Arbitration proceeding                                 206,250                -
 Litigation proceeding                                  500,000                -
                                                    -----------      -----------
    Income  from operations                             556,561          196,749

Other  Income:
  Interest   income                                       1,397            4,034
  Foreign currency                                       33,232           72,249
                                                    -----------      -----------
Other  income                                            34,629           76,283
                                                    -----------      -----------
   Income  before taxes on income                       591,190          272,032
Tax  provision                                           46,800           12,517
                                                    -----------      -----------
   Net income                                       $   544,390      $   260,515
                                                    ===========      ===========

Net income  per share:
 Basic and Diluted                                        $0.06            $0.03
                                                          =====            =====

Weighted average shares-basic                         8,901,734        8,862,774
Weighted average shares-diluted                       9,749,907        8,959,821


<PAGE>

                    HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)


                                                    Six  months ended March  31,
                                               ---------------------------------
                                                       2004            2003
                                               ---------------------------------

Net Sales                                           $35,034,581      $29,439,344
Cost  of Sales                                       25,521,988       22,148,910
                                               ---------------------------------
  Gross Profit                                        9,512,593        7,290,434

Selling, General and  Administrative Expenses         6,344,385        5,430,774
Research & Development Expenses                         854,664          941,324
Arbitration proceeding                                  206,250                -
Litigation proceeding                                   500,000                -
                                               ---------------------------------
  Income  from operations                             1,607,294          918,336

Other  Income:
 Interest   income                                        3,136           10,005
 Foreign currency                                        21,899           27,646
                                               ---------------------------------
Other  income                                            25,035           37,651
                                               ---------------------------------
   Income  before taxes on income                     1,632,329          955,987
Tax  provision                                           95,079           39,000
                                               ---------------------------------
   Net income                                        $1,537,250         $916,987
                                               =================================

Net income  per share:
 Basic                                                    $0.17            $0.10
 Diluted                                                  $0.16            $0.10
                                               =================================

Weighted average shares-basic                         8,891,135        8,860,578
Weighted average shares-diluted                       9,576,099        8,917,935


<PAGE>

<TABLE>


                    HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<S>                                                                     <C>    <C>    <C>    <C>

                                                                    March 31,          September 30,
                                                                      2004                2003
                                                                   (Unaudited)          (Audited)
                                                                   ---------------------------------

Assets:

 Current Assets:
   Cash and cash  equivalents                                     $   6,535,122      $   5,838,160
   Receivables, net of  various allowances                            9,717,906          9,182,758
   Inventories                                                        9,557,603          5,474,374
   Prepaid expenses and other current assets                            679,503            546,328
                                                                  --------------------------------
     Total current assets                                            26,490,134         21,041,620

     Property, plant and equipment, net                                 458,310            532,516
     Security deposits and other non current assets                      76,216             76,216
                                                                  --------------------------------
                                                                  $  27,024,660      $  21,650,352
                                                                  ================================



Liabilities and  Stockholders'  Equity:

Current Liabilities:
 Accounts payable                                                 $   8,806,754      $   7,452,867
 Accrued expenses                                                     4,019,145          2,539,678
 Income taxes payable                                                   187,730            189,122
                                                                  --------------------------------
     Total current liabilities                                       13,013,629         10,181,667

Stockholders' Equity
  Common stock $.01 par value; 25,000,000 shares authorized,
   9,476,669 and 9,420,315  issued, respectively                         94,767             94,203
  Additional paid-in capital                                         12,410,791         12,302,119
  Retained earnings                                                   1,637,237             99,987
  Accumulated other comprehensive income                              1,365,452            469,592
  Treasury Stock, at cost, 542,067 shares                            (1,497,216)        (1,497,216)
                                                                  --------------------------------
     Total stockholders' equity                                      14,011,031         11,468,685
                                                                  --------------------------------
                                                                  $  27,024,660      $  21,650,352
                                                                  --------------------------------

</TABLE>

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