Fitterdude, agree - excellent point. Along those lines, if digesystem does Divx, then aren`t we somehow integrated with all our encryption and firmware? I think you ask a very important question. Why would Wencor try to reinvent the entire system, when secure delivery of this studio content is a major facet of a successful product?

SAN DIEGO--(BUSINESS WIRE)--Oct. 20, 2003

High-Quality DivX(R) Video Technology and e.Digital`s Hardware and

Firmware Make First Run Movie Content Secure In the Skies

e.Digital Corporation (OTC:EDIG) today announced that APS` digEplayer(TM), designed, developed and powered by e.Digital technology, will use patent pending video and security technology supplied by DivXNetworks. e.Digital`s technology includes proprietary hardware and firmware to secure the content available on the portable video-on-demand entertainment system.

APS` digEplayer, scheduled for availability to Alaska Airlines passengers this month, offers passengers fresh content selections, including first run movies not yet available on video, classic films, television programming, music and other entertainment options. The content, including full-length movies from Twentieth Century Fox, will be encoded in secure, high-quality DivX video.

APS` digEplayer provides an excellent example of one of the many uses for e.Digital`s MicroOS(TM) based proprietary video platform. Licensing opportunities for Original Equipment Manufacturers offer the flexibility to customize the system to a variety of specifications for a variety of new and untapped markets.

``For this project, e.Digital thoroughly researched several of the available compression technologies,`` commented Fred Falk, e.Digital`s president and chief executive officer. ``It was clear that the security, compression and visual quality provided by DivX technology is the right choice for this device.``

``e.Digital designed a truly unique device that serves the diverse needs of the airlines and many other markets, and we`re excited to provide the video and security technology to help make portable, secure video-on-demand a reality,`` said Jordan Greenhall, founder and CEO of DivXNetworks, Inc. ``We look forward to continuing to work with e.Digital on this and other devices.``

``DivXNetworks has been instrumental in the success of the development of the world`s first portable VOD In-Flight Entertainment product,`` said e.Digital`s senior vice president of research and development, Atul Anandpura. ``e.Digital`s MicroOS(R) platform has been expanded to add secure video playback technology through the development of proprietary encryption and hardware. The content encryption scheme provided by DivXNetworks has supplemented the strength of the overall product.``

The digEplayer was officially unveiled by APS and e.Digital at this year`s World Airline Entertainment Association (WAEA) Conference and Exhibition in Seattle on September 9th.

About e.Digital Corporation

e.Digital Corporation specializes in technology innovation and applications integration through engineering partnerships with leading original equipment manufacturers (OEMs) designing, licensing, branding, and manufacturing digital audio, video and wireless products and technology platforms. The Company also sells its Odyssey 1000(TM) digital jukebox through selected e-tail and retail outlets. Applications for e.Digital`s technology include delivery and management of open and secure digital media with a focus on music, voice, wireless and video players/recorders, automotive infotainment and telematics systems, portable digital music players and voice recorders; desktop, laptop, and handheld computers; PC peripherals; cellular phone peripherals; e-books; video games; digital cameras; and digital video recorders. Engineering services range from the licensing of e.Digital`s patented MicroOS(TM) file management system to custom software and hardware development, industrial design, and manufacturing services. For more information about e.digital and its products, please visit the company website at www.edigital.com.

Safe Harbor statement under the Private Securities Litigation Reform of 1995: All statements made in this document, other than statements of historical fact, are forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the businesses of the Company and the industries and markets in which the company operates. Those statements are not guarantees of future performance and involve risks, uncertainties and assumptions that will be difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by those forward-looking statements. More information about potential factors that could affect the Company can be found in its most recent Form 10-K, Form 10-Q and other reports and statements filed by e.Digital with the Securities and Exchange Commission (``SEC``). e.Digital disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated by it.

Editors Note: digEplayer is the trademark of APS, Inc. MicroOS is the registered trademark of e.Digital. All other company, product, and service names are the property of their respective owners.

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