OT Chowder:

Pro-sumer: Means... it's good enough to make your living with even though you make your living doing something else.

Hope this helps!
gp

OT,OT,OT,OT. Can't say you weren't warned!

Chowder: Please allow one shameless, off-topic, self-serving, spam to a former edigger for old-time sake...

Started a new company back in the spring... I decided it was better for me to focus on things I actually KNOW something about (as opposed to the stock market!) so I went to work developing a new product (line) and establishing a company to market it. Our initial product can be seen at:

www.betteroutdoorproducts.com

This is the first in a series of Pro-sumer grade machines developed for homeowners seeking a "Pro-Quality" mower and for light commercial landscape maintenance operators. We have good interest from Lowes and Tractor Supply Stores as well as a number of hardware distributors. Still working to get an audience with Home Depot. Also pursuing some direct to end-user net marketing. (and yes... we're looking for investors!)<<< not that this is a solicitation! <grin>

Anyway, I thought a couple of you might enjoy seeing the product.

BTW, congrats to you all on the GTW deal. Hope you guys finally turn the corner.

Regards and Happy Holidays,
Gary

Conversion price on the Series D shares

is now .19 which equals 11,052,630 common shares.

Look at the numbers.

As most of you know by now, I sold my entire position after the SHM. Like many of us here, for me, e.Digital has become an investment of "self" and is difficult to let go of. Many of us truly believed that we had indeed found the next Microsoft. The company whose operating system would enable an entire new generation of handheld computing devices. Heady stuff, to say the least... the kind of stuff that people develop incredible expectations around. I've been watching very closely for the last ~45 days, looking for signs of something promising. This dream is hard to let go of.

I have asked very pointed questions of the company regarding MicroOS and have always received vague, "thin" answers. It has become my belief that the company doesn't even see MicroOS as being a significant component of the future. RP doesn't even like to talk about it in any real way.

So what are we left with? What we're left with is a bloated contract design house developing fairly simple products for foreign manufacturers in an ultra competitive marketplace. All of the "Big Guys" have come in, smoked-over our technology and walked away. At .20/sh, if our tech was "all that" I suspect an Intel or an IBM would gladly buy a large stake in our company. I suspect their judgement and evaluation is infinately more valuable than mine (or anyone else's for that matter).

IFE will undoubtedly be a huge industry, kinda like telematics. But if our role is only as a product designer, with someone like a DigitalWay reaping the majority of the value-added, then we're left with NRE's and paltry royalites as our income stream. If the deal with Musical is any indication, royalties are very minor. I do not remember the exact amount of the XP3 royalty, but memory says it was something in the $1/unit range.

So... look at the numbers for a minute. But first, look at DigitalWay's site. According to DW, the have the capacity to product 30-50,000 units (MP3 players) per month (or 600K units for the math impaired). It's also important to note that DigitalWay's GROSS REVENUE was only 23.5 Million bucks. This is NOT a big company. So, let's go nuts and say that DGN lands an OEM for the O-1000 that wants a million units per year. Let's also go nuts and say that DigitalWay will pay us $3 unit as a royalty for using our design. That's THREE MILLION DOLLARS in gross revenue. Now... subtract out our burn rate and divide by the number of outstanding shares and what do ya have? Double it and divide by outstanding shares and what do ya have? Quadruple it... Apply even the most optimistic price to earnings ratio and what do you have? You've got squat.

To be brief, my point is, that without MicroOS as the vital, must-have technology that companies are flocking to (and willing to pay for), as they did with MSFT-DOS, we're left with the "World's Largest Lemonaide Stand". e.Digital would be a fine little privately held company for a half-dozen sharp engineers, but without a "global standard" MicroOS, it simply doesn't have a business model to support ~150,000,000 shares outstanding. Geez, I'm a one-man product development company working in a spare room of my home, in an "old economy" industry and I produce more royalty income than e.Digital. These guys are jokers.

There are a lot of good and earnest people on this board who are gonna get a spankin on this thing. I truly hate it for all of us. But at this point, owning e.Digital is absolutely nothing more than gambling.

All the above is purely my own personal (and at this point, most humble) opinion.

Good luck and best regards,
Gary

JimC:

I've been following your posts and have to ask the obvious question.

With 3-100K share buy orders in place and "threatening" to place an additional million share order, all added to the over 1 million shares you claim to already own, what is your basis for such enthusiasm? What's soooooo good to give you this level of confidence?

Oddysey 1000: Great product but over our head financially. Probably get licensed to DigitalWay for sale through DGN with terms comparable to our license with Musical. A coupla bucks/unit. 100,000 units = $2-3K in revenue to us. Big whoopie.

IFE: Again, great market, great potential, but how are WE going to capitalize on it with no cash to build end product?

Fujitsu-Ten: Who in the hell knows.

B&O: Ego piece, but no real revenue of consequence.

$2 MM in notes due in less than two weeks.

~10MM shelf shares remaining with a current value of $2MM.

<I've tried to not purposely pick at anything or to exaggerate, just state the facts we know as of this date>

If you've gone "insider" through some involvement with the financing, you'd be a fool to make such public statements. If you're not an insider, then you can't possibly know anything the rest of us don't (at least that you could tell on a public message board).

So what is this all really about?

Do you know something, or are you just sand-baggin and showing off?

Gary

PS: If you do have such profound faith in the future of this company, why were you not able to relate that vision to your buddy who sold the 300K shares last week?

Milplease:

Not to say that it is or isn't Sony, but it would be good to remember that Sony is actually two companies; Sony Entertainment and Sony Electronics, fwiw.

gp

Packman:

My money (and a lot of other good people's) is still on the table.

You took your's off, which is entirely your perogative. I wish you luck.

The net effect of all your continued negative posting on a public message board however, is worse than anything any basher could do. The people who have chosen to continue with this company do not need further demoralization and we certainly don't need people feeding the bashers. You ain't helping Buddy... you're just further screwing with MY investment and I wish you'd stop it.

If you have questions for management, take it up with them. IN PRIVATE.

TIA,
Gary

OT Chat Problem:

whenever I try to log into chat, I get a message that says "that user name is already in use".

Any ideas as to what that's all about?

GP

email to Putnam (and response)

Dear Robert,

Congratulations on the good news regarding DGN/Digitalway. It appears that we're systematically forging relationships with everyone in the world that matters which prompts my question to you;

Do we currently have (or are we pursuing) either direct or indirect relationships with SonicBlue and/or Creative?

Thanks,

Gary

Thank you for your e-mail, Gary. While we appreciate your questions, we are
not at liberty to comment at this time. Thank you for your understanding.

Best regards,

Robert Putnam
Senior Vice President

FWIW: I saw a JVC indash stereo at Circuit City the other day. XM capable, but it also had an RCA mini jack on the face plate. This would allow the user to plug their jukebox directly into the car system, hassle free. This seems like such an obvious solution, I'm surprised more stereo manufacturers haven't done this as well. Sometimes the simple ideas are the best.

LUCK TO LONGS! VIVA e.Digital!

GP

OT Chat Problem:

I tried several times to log in to chat and received the message that there was another user by that name already logged in. I cold booted the computer and still have the problem. Anyone else having trouble with chat?

regards,
Gary

Question regarding "ripping" CD's:

I have been busy transferring music to my XP3. After unraveling a couple of logic issues posed to my clearly analog, 45 year old brain, I can say that the unit is very easy to use. This is my first real experience with copying a CD and transferring it to a digital device and I have noticed one thing that leaves me baffled:

Using the MusicMatch S/W, the CD's record to my laptop with little effort. The order of play is usually altered, but this is easily "corrected" in the Options menu. Now, I understand why folks want a fast CD drive, as it usually takes about 10-12 minutes to encode an album. After the music is captured in my laptop, transfer to the XP3 only takes 1-1 1/2 minutes. All this noise about Firewire is much ado about nothing, IMO. Maybe George Bush is too busy for USB, but the rest of us should be just fine. Anyway... set up a general directory for the artist and then a sub-directory for the specific album and voila! My problem is that most of my CD's make the trip just fine, but thus far, I have two CD's (about 10%) that will not load to the device. They encode to the laptop just fine. CDDB recognizes them and sets up the tracks, knows the CD name, sets up the directory, all flawlessly. But when it comes time to download to the XP3 and specifically set up a directory and sub in the XP3 HDD, it does not always offer me that option. In the instances where it does, the XP3 will attempt to download the files from my laptop and when it reaches 99% of track one, it gives me a fatal error message and locks up both the laptop and the XP3. Needless to say, I have gotten good at taking the battery out of the unit. The two CD's that are giving me fits are a recently remastered version of Elton John's "Tumbleweed Connection" and the Eagles "Hell Freezes Over". Are these CD's copy protected? The jewel box gives no indication that they are, but by the way they behave, I have to wonder.

Anyone out there have any wisdom?

Happy New Year to all!

Gary

Submit your review of the CHD-1000 at CircuitCity.com

and don't forget to mention the "No computer required" feature.

Happy Thanksgiving America!

best regards,

Gary

For the IJSWRP File:

A few of us were talking about the subscription services and possibilities for bundling players... Got me started thinking about AOL. My question to Robert was, "Do we have a direct or indirect relationship with AOL/Time-Warner". Here is his response.

Hi, Gary,

To date, we have not announced a relationship with AOL/Time-Warner.

Please e-mail me or call me at your convenience if I can be of further
assistance.

Best regards,

Robert Putnam
Senior Vice President

e.Digital Corporation

draw your own conclusion, but no would have been a much shorter answer, doncha think? A bundling deal with AOL would be HUGE!

GP

OT: Thoughts on Airline Safety

Being the fiercely independent person that I am, and leaving few things in my own life, the responsibility of someone else, I would propose the following. I welcome and invite debate on this topic.

I believe the overwhelming majority of people in the world are good. They're honest, dependable and strive to make good things happen in their lives and the lives of all they know and love. We must not allow ourselves to become convinced that the world is a bad and horrible place and to doubt the integrity of all around us, or the terrorists will have indeed accomplished their mission.

What if the airlines were to develop a small, plastic, non-lethal pistol containing 2-3 rounds each of bird or rat shot. Provide these pistols to every adult passenger and crew member boarding a plane in the United States. In other words, arm the entire passenger population in an effective, yet non-lethal way. If every single passenger on the recent WTC and Pentagon suicide flights had been armed, there is no way that 4 or 5 terrorists could have dealt with 40 or 50 or 100 armed passengers. At worst, all they could have done would have been to blow up the plane. They would have never made it to their eventual targets.

Good, will always outnumber evil. With that thought, why not place the job of protecting ourselves squarely in the hands of those with the most at stake. Sky marshalls are not the answer. 4 or 5 terrorists would overwhelm a single sky marshall. They simply couldn't deal with ALL of us. We cannot and should not expect our government to take responsibility for the safety of nearly 300 million citizens. They simply cannot be everywhere that we are. The responsibility is in our hands as individuals. We must rise to this challenge, not just on our planes, but in every aspect of our daily lives.

I know that guns have been demonized in the press and that this idea will surely be seen as a politically-incorrect, hot-button for many. I look forward to the responses however, from this good and level-headed group of folks.

If you like this idea, pass it on to others in your email circle. Who know's, someone might pick up on it. If you don't, bring on your argument!

best regards to all my e.Digital friends,
Gary

Related OT, but interesting none the less:

note to cksla...look what you've started now! ;)

http://www.newmassmedia.com/nac.phtml?code=new&db=nac_fea&ref=16435

Reply from RP 8/03/01:

well...Packers was right! RP responded to my letter with a phone call and I was caught completely unprepared. Conversation lasted 4-5 minutes and absolutely nothing new was discussed. Just a rehash of what we've all heard 100 times before. Digital handheld device market just emerging...MicroOS is the glue...e.Digital essentially has no competition...not waiting on music, working on other platforms....announcements coming...yada, yada, yada... Attempts at new information are futile, IMO.

Gary

My email to RP sent 8/3/01:

Good Morning Robert,

I hope you are well.

This letter is not to ask or badger about Treo, Dataplay, Hango, Eastech, product releases, revenue guesses or the million other things you are bombarded with daily. I'd like to ask you about a much larger issue.

As someone who's made his living in the product development business, I understand the hazards of moving "your" design into "their" organization. This is a tricky process and I've had more than one product killed outright in the move. You're constantly battling the "not invented here" syndrome as well as the inevitable ego clash of different corporate cultures combined with the general uncertainties of the new target market itself. I applaud your decision to bring in Jim Collier as the "Shepherd" to faithfully bring our product visions to market. Most folks have no clue as to the amount of blood spilt in the process of bringing something genuinely new to the public. My hat is off to ya!

I also know that until I started developing and licensing complete design packages, all I was doing in my business, was surviving. Non-recurring Engineering Fees, no matter the quality of the work, usually generates just about as much cash as it consumes. Without long-term licensing, all you really have is a "good job". With that thought in mind, I would like to hear some of your thoughts regarding the long-term goals of the company for MicroOS.

It has been mentioned on several occasions that the company is working to make MicroOS a Global Standard for file management in handheld devices. This, in my mind, is "The" opportunity. Products like the Treo, Orbit, CQuence, etc. are nothing more than interim "light and phone bill killers". Much has been written in the press over the last 18 months regarding SoC design and a variety of solutions from some pretty smart folks all designed to serve the emerging handheld device market. How does MicroOS stack up these days to the competition? What are the compelling reasons that companies should license MicroOS? What do Fred, Norbert and Atul see as the critical path to make MicroOS ubiquitous in handheld products. Within the constrictions imposed by our NDA's, where are we on that path? Are there companies developing products independently of e.Digital which utilize MicroOS? Are our MicroOS licensing agreements of sufficient length to allow time for the products to ramp up in the market and for us to benefit from significant market penetration? Does the e.Digital vision for MicroOS include use in phones and are companies like Qualcomm, Nokia and Erikkson prospects for licenses? Which company(s) and what product(s) most threatens this vision?

Most folks are utterly focused on specific product releases. I suppose it's because they want something they can hold in their hand and say "I had a part in this". To me however, the proliferation of MicroOS is where our future lies. Not just in products we've designed, but more importantly, in products which other companies design. A non-specific update on this subject would be greatly appreciated.

One last question (two actually!)... Do you anticipate our "Strategic Partner" taking a significant equity postion in the company and will this involve issuance of additional stock?

I would appreciate a short written response when you have time. Phone calls are great, but much is lost in the translation. I have a number of shareholder friends who will be anxious to hear your response.

All good wishes and Godspeed!

Gary Patridge

cksla Re: Pilot Run

Good companies normally do Pilot Runs on any new product. They are essentially a "dress rehearsal" for real production. During a pilot run, the company gets a chance to test all their systems. They generally utilize a smallish batch of parts produced from (what they hope are) final versions of all the production tools involved. In the case of a Treo-type product, I would suspect there are upwards of 25 tools per design including injection mold dies, stamping tooling and circuit board tooling. Tooling for high volume consumer products is often extremely sophisticated and expensive and takes a great deal of time and craftsmanship to produce. The company would also take this opportunity to test assembly line fixturing as well as transfer lines or tables, any automated systems, check their work balancing at various assembly stations and factually determine rates of production. They would also test their end-product Quality Control methods and try out their finished product packaging and bulk-cartoning systems. As silly as it sounds, when you're planning to produce something at the rate of several hundred (or thousands!) per hour, getting the product in a box can become a real challenge.

High volume production of a product is an attempt at perfection which is constantly hounded by the odd exception. Pilot runs provide an opportunity to identify and eliminate as many gremlins and weak links as possible before throwing the "Big Switch".

Is this a "Basher-Free" zone? GPDesign1