E.DIGITAL CORPORATION AND APS, INC. UNVEIL INSTALLED IFE SYSTEM

International Airlines AEROFLOT and KLM to Offer digEplayer 5500™

(SAN DIEGO, CA, September 27, 2004) – e.Digital Corporation (OTC: EDIG), a leading innovator of proprietary digital audio and video technology platforms, and APS, Inc., a leading innovator in in-flight entertainment systems, successfully unveiled working prototypes of an installed version of APS’ digEplayer™ video-on-demand (VOD) system at last week’s 25th Annual Conference and Exhibition of the World Airline Entertainment Association (WAEA) in Seattle.

The new installed in-flight entertainment (IFE) system is expected to be the first independent VOD system, without any dependence on a central server. Content can be easily loaded to the system to hard drives with capacity for 60+ full-length feature films. The system is also expected to include television shows, music and video games.

“We are pleased to be working with APS on this installed MicroOS™-powered version of the digEplayer,” remarked Atul Anandpura, e.Digital’s president and chief executive officer. “Beyond it’s many other advantages, this system alleviates logistics support and will be easy to service and maintain.”

“For cost-conscious regional airlines looking for an embedded solution, we have the answer,” said Bill Boyer, president of APS. “We received strong interest in this new installed system at the conference from several airlines looking for an alternative to the heavy, expensive systems currently on the market. We continue to experience growing acceptance of the portable digEplayer 5500, with Ryanair, KLM, AEROFLOT and other airlines coming aboard as our newest customers. By offering both a portable and installed version of the digEplayer, we are well-positioned to rapidly grow our IFE sales.”

“This WAEA conference was very successful for e.Digital and APS,” concluded Anandpura. “In addition to the Ryanair, KLM and AEROFLOT orders, we expect further business will result from the meetings held last week in Seattle.”

Manufactured by e.Digital Corporation for APS, the digEplayer 5500 features the latest technology licensed from e.Digital (MicroOS™ and engineering) and DivX (compression).

About e.Digital Corporation: e.Digital Corporation partners with leading original design and equipment manufacturers (ODMs/OEMs) licensing, designing and providing manufacturing services for ODM/OEM-branded digital video, digital audio and wireless products based on the company’s proprietary MicroOS™-enabled technology platforms. e.Digital specializes in the delivery and management of open and secure digital content through it’s personal video, personal audio, automotive, and wireless technology platforms. e.Digital’s services include the licensing of the company’s MicroOS™, custom software and hardware development, industrial design, and manufacturing services through the company’s manufacturing partners. For more information about e.Digital and its proprietary technology platforms, please visit the company website at www.edigital.com.

About APS: APS is a privately held company based in Tacoma, Wash., which specializes in innovative technology for the airline industry. The digEplayer 5500™ is an example of the industry-changing products offered by APS as the company looks into the future of the transportation and leisure industries. For more information about the digEplayer 5500™, contact APS at (253) 284-4445 or visit www.digeplayer.com.