E.DIGITAL CORPORATION ANNOUNCES PRODUCT DESIGNS TO BE FEATURED AT 2001 CES

Introduces MicroCAM, A MicroOS-Based Compressed Audio Management Tool Embedded in Designs

(SAN DIEGO, CA – January 2, 2001) - e.Digital Corporation (OTC: EDIG), a global provider of comprehensive digital product development and designs, today announced that products based on e.Digital's proprietary MicroCAM™ (MicroOS-Based Compressed Audio Manager) technology will be featured at the 2001 international Consumer Electronics Show (CES) held January 6-9 in Las Vegas. e.Digital's hard-drive based portable jukebox design, MP2000 portable Internet music player design, new DataPlay-enabled digital audio player, and DataPlay-enabled MP3 encoder design will be on display throughout the four-day show. All of the designs are engineered by e.Digital using its MicroCAM technology and incorporating Digital Signal Processors (DSPs) from Texas Instruments.

Hy-Tek Manufacturing is scheduled to demonstrate the Treó digital jukebox, a portable jukebox design created by e.Digital, in their booth (Las Vegas Convention Center [LVCC], #6643). The MP2000 is scheduled to be on display in the Microsoft Pavilion (LVCC, So. 3-5, Booth #626). Another version of the MP2000 is expected to be featured in the SD Card Association Pavilion (LVCC, North Hall, Booth #L5158). e.Digital is scheduled to debut their DataPlay-enabled product designs in the DataPlay Partners Pavilion (LVCC, So. 3-5, Booth #1357). Additional product designs based on e.Digital’s proprietary MicroCAM and/or MicroOS technologies will be featured at CES in technology suites where private demonstrations have been arranged for OEM customers and licensees.

Fred Falk, President and CEO of e.Digital, said, "We are particularly excited about our hard-disk-based portable jukebox design and believe it has the potential to be the hottest-selling portable jukebox product of 2001. With up to 10 Gigabytes of embedded storage, users can download their entire personal CD collection and carry a lifetime of music in their shirt pocket. We believe our design presents formidable competition to other jukebox products already on the market.

"Using MicroCAM, we have incorporated native multi-codec/multi-DRM compatibility into a variety of digital audio product designs, offering OEM customers an extremely attractive and flexible feature set. During CES, our partners and customers are expected to demonstrate current products as well as designs that are scheduled to reach the market in the coming months. We look forward to releasing further details and more announcements throughout this week.

Chris Schairbaum, New Business Development at Texas Instruments Internet Audio, stated, "TI DSPs are well adapted for use in digital audio devices and a variety of other portable product applications. The combination of e.Digital's proprietary technology and our DSP chips enhances the compatibility and feature set in end user products. We are looking forward to many new potential applications for our DSPs, and expect to continue strengthening our business relationship with e.Digital."

Atul Anandpura, e.Digital's Vice President of Research and Development, added, "MicroCAM, based on e.Digital's patented MicroOS technology, is a key element in our digital audio recorder/player designs. It simplifies digital audio device development for our OEM customers, and allows for the integration of several audio compression and decompression formats (known as codecs) in a single device.

"This platform is capable of supporting MP3, ePAC, AAC, QDX, and Windows Media Audio formats for music as well as commonly used algorithms for voice file compression. It supports RioPort, MusicMatch, Windows Media Player, RealJukebox, and Liquid Audio desktop media management tools, with additional support being added constantly. Its IDE/ATA/ATAPI-compatible interface supports all major types of storage media, removable or embedded, non-volatile or rotating."

Product Design Features

e.Digital's portable jukebox design incorporates a 10 GB hard drive, enough to hold more than 3,000 CD-quality songs in popular music compression formats. The design offers music consumers a simple user interface to store, organize, and play back tracks in any order. It supports multiple music codecs including those being adopted by the major record labels, and is approximately the size of a deck of playing cards. Treó, the jukebox's brand name as it is being offered to U.S. consumers by Hy-Tek Manufacturing, is expected to retail for under $400 and is scheduled to begin shipping in Q1 2001. Details are available at www.treoplayer.com.

e.Digital's DataPlay-enabled digital audio player supports multiple audio compression formats and multiple Digital Rights Management (DRM) systems. DataPlay optical storage discs from DataPlay Inc. in Boulder, Colorado, can store 500 MB of music, video, graphics, and other content on a disc about the size of a quarter that is expected to retail for less than ten dollars. Universal DataPlay discs are capable of playing and recording multiple types of content on a single disc. DataPlay discs will be used in digital music players, electronic book readers, PDAs, digital cameras, portable games, and many other consumer electronic devices and Internet appliances.

The portable MP2000 design supports multiple music compression formats including MP3, ePAC, AAC, Windows Media Audio, and QDX. It also supports multiple Digital Rights Management (DRM) systems and is compatible with SDMI security guidelines. The MP2000 design will be shown in two configurations accepting CompactFlashTM, MMC, or Secure DigitalTM Memory Card (SDTM Card) removable media.

The devices are powered by TI's TMS320C5000(TM) family of ultra-low power programmable DSPs. The C5000 family offers the most power-efficient DSP with a complete software solution of IA decoders, encoders, and Digital Rights Management (DRM) security software.