e.DIGITAL CORPORATION UNVEILS eVU™

MOBILE ENTERTAINMENT DEVICE AND BUSINESS STRATEGY

Company Provides Updated Business Guidance

(SAN DIEGO, CA, – December 22, 2005) – e.Digital Corporation (OTC: EDIG), a leading innovator of proprietary secure digital video technology, today unveiled its new proprietary eVU™ mobile entertainment device (formerly known as MedeViewer™) (please view the following link of the Med-eVU™ version of the product: www.edigital.com/evu.htm). This newly designed first generation product, based on e.Digital’s proprietary digital video technology, features razor-sharp images on its 7” high resolution LCD screen, superb audio fidelity, dual stereo headphone jacks, embedded credit card reader/processor, touch screen capabilities, bright full featured graphical user interface, e.Digital’s patent-pending hardware security technology, 10+ hours of high resolution video playback on a single battery charge, and more.

“Using our new hardware and software design, eVU builds upon the success of the in-flight entertainment (IFE) product we designed using our patented technology, and continue to sell,” said Will Blakeley, e.Digital’s president and chief technical officer. “We are leveraging this success by offering a new enhanced product to companies who share our vision of capitalizing on significant business opportunities for secure hard drive-based closed system video products loaded with desirable movie, television, music, informational, and educational content that are rented or provided to customers.”

Blakeley continued, “With the assistance of financial partners, we are working on a turnkey entertainment services solution to provide companies not only the eVU, but also the logistics support needed to deploy, operate and maintain their services and enabling e.Digital to receive on-going monthly revenues. More importantly, this solution, if fully implemented and accepted, would enable us to become profitable with annual sales going forward equaling less than half of the currently fielded base of 8,000+ IFE units. ”

“We are currently working with U.S. and international companies in the healthcare and travel and leisure industries who desire to brand and market eVU, as well as expand industry and market awareness of the benefits of secure closed system video products,” remarked Blakeley. “We believe many of the markets within these industries are larger and have the potential to be more lucrative than the IFE industry, while possessing fewer logistics, financial and competitive challenges. Using our enhanced business strategy, we expect to capture more margin on each product sale as well as collect monthly revenues generated from content and services.”

Blakeley concluded. “We are on schedule to complete and receive payments for approximately $750,000 in IFE orders this quarter with additional IFE orders totaling $450,000 expected next quarter. Also, we expect our first eVU orders to ship next quarter and expect fiscal 2006 revenues will exceed fiscal 2005 revenues. We also look forward to announcing eVU customers next quarter and throughout calendar 2006.”