e.DIGITAL AND DIVXNETWORKS PARTNER TO SUPPLY THE TECHNOLOGY INSIDE APS’ DIGEPLAYER™

High-Quality DivX® Video Technology and e.Digital’s Hardware and Firmware Make First Run Movie Content Secure In the Skies

(SAN DIEGO, CA - October 20, 2003) - e.Digital Corporation (OTC: EDIG) today announced that APS’ digEplayer, 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™ 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 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.