SAN DIEGO--(BUSINESS WIRE)--Jan. 9, 2003

e.Digital Charter Company in PortalPlayer's Design Partners Program; A

Fast Track to Consumer Entertainment Products

e.Digital Corp. (OTCBB:EDIG) today announced a development and co-marketing partnership with PortalPlayer Inc.

As a PortalPlayer Design Partner, e.Digital plans to develop new digital audio products combining PortalPlayer's single-chip integrated circuit for music encoding and playback with e.Digital's reference designs. As part of the agreement, PortalPlayer will refer pre-qualified OEM customers to e.Digital for product development using PortalPlayer's chip set.

"Researchers from IDC forecast that the digital audio market will exceed 200 million units worldwide by 2006, presenting a great opportunity for OEMs who can deliver compelling and powerful entertainment devices," said Michael Maia, vice president of marketing for PortalPlayer. "We qualified e.Digital as one of our charter Design Partners because of their ability to speed manufacturers time-to-market and expertise in system integration, firmware development and project management."

Fred Falk, president and CEO of e.Digital, said, "We are pleased to continue our tradition of incorporating new technologies with our MicroOS(TM) to create useful applications and attractive products for OEM customers. Being a charter company in PortalPlayer's Design Partners Program puts us in a position to help OEM customers navigate emerging industries, determine the quickest path to product completion, and launch a number of different products with the latest features. It opens the door for revenue-producing opportunities from a broader customer base."

The PortalPlayer Design Partners Program provides a fast track to new system designs by giving OEMs access to the engineering resources and complementary intellectual property of its qualified partners, and PortalPlayer's system-on-chip (SoC) platforms, firmware, system architecture, and PC-based digital media management applications. Using PortalPlayer's platforms as a starting point, Design Partners work with OEMs to quickly and cost-effectively build differentiation into next generation products.

About PortalPlayer Inc.

PortalPlayer Inc. supplies consumer electronics manufacturers with complete platform solutions, including SoCs (System-on-Chips), firmware, PC-based software and access to third-party technologies. The company develops and markets advanced systems for digital audio recording and playback, using MP3 and other popular digital compression technologies. Founded in May 1999, PortalPlayer is headquartered in Santa Clara, Calif., with major offices in Seattle; Charlotte, N.C.; and Hyderabad, India. The company has grown to more than 150 employees worldwide and has received four rounds of venture capital funding. Investors include Band of Angels Fund, CIBC World Markets Corp., Flatiron Partners, Investcorp International, J.P.Morgan Partners, LSI Logic Corp., Linear Technology Corp., Portal Partners, Shamrock Capital Advisors, Techfund Capital, Thomas Spiegel and Vulcan Ventures Inc.

About e.Digital

e.Digital Corp. designs, licenses, brands, manufactures, and sells digital audio products and technologies. The company's trademarked digital audio players include the MXP(TM) 100, Treo(TM) portable digital jukebox line, Silhouette(TM) ultra-slim MP3-CD player, and Odyssey(TM) line of flash- and hard disk drive-based players. e.Digital launched WeDigMusic.com to complement its digital audio players by providing consumers with a one-stop-shop for streaming and downloading music from thousands of artists on the Web. The company also offers an engineering partnership for the world's leading electronics companies to link portable digital devices to PCs and the Internet. e.Digital develops and markets to consumer electronics manufacturers complete end-to-end solutions for delivery and management of open and secure digital media with a focus on music, voice and video players/recorders, and automotive infotainment and telematics systems. Other applications for e.Digital's technology include 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 on the company, please visit www.edigital.com. To shop at the e.Digital online store, please visit www.edigital-store.com.