e.Digital Corporation (fka EDIG)

[prehistory]

PRESS RELEASE

E.DIGITAL AND CORNICE PARTNER TO PROVIDE OEM SOLUTIONS FOR PORTABLE MUSIC PLAYERS

Products Scheduled to Reach Consumers in Early 2004

(CES - Las Vegas, NV – January 7, 2004) – e.Digital Corporation (OTC: EDIG) today announced that it is developing digital audio products that incorporate the Cornice Storage Element for distribution by specific OEM partners and customers in early 2004. These digital audio players will feature e.Digital’s MicroOS™ technology and proprietary hardware and firmware paired with Cornice’s high-capacity, low-cost, Storage Element.

“e.Digital technologies and the Cornice Storage Element are natural complements,” noted Kevin Magenis, Cornice president and chief executive officer. “The size and affordability of the Storage Element combined with e.Digital’s highly flexible MicroOS technology create the means for original equipment manufacturers to achieve their product goals of ”pocket-ability” combined with outstanding price and performance.”

e.Digital and Cornice have been cooperating on the development of new products for several months. Pre-production samples will be available for viewing at CES by appointment only. Contact Jo Ann Platt for an appointment at [phone].

“The consumer electronics market is demanding smaller devices with robust functionality and increased storage capacity,” said Fred Falk, president and chief executive officer of e.Digital. “The Cornice Storage Element provides tremendous capacity in a highly compact, cost-effective package. Combining the Cornice 1.5 gigabyte and the recently announced 2 gigabyte Storage Element with the power and flexibility of our MicroOS enables us to deliver an increasingly sought after OEM solution.”

About e.Digital Corporation: e.Digital Corporation specializes in technology innovation and applications integration through engineering partnerships with leading original equipment manufacturers (OEMs) designing, licensing, branding, and manufacturing digital audio, video and wireless products and technology platforms. The Company also sells its Odyssey 1000™ digital jukebox through selected e-tail and retail outlets. Applications for e.Digital's technology include delivery and management of open and secure digital media with a focus on music, voice, wireless and video players/recorders, automotive infotainment and telematics systems, 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™ file management system to custom software and hardware development, industrial design, and manufacturing services. For more information about e.digital and its products, please visit the company website at www.edigital.com.

About Cornice: Cornice Inc. is an innovator in small, compact, low-cost, high-capacity storage that enables a new generation of pocket-able consumer electronic devices for the world’s leading brand-name manufacturers. The Cornice Storage Element (SE) is durable, integrated, personal storage that brings new levels of affordability and content capacity to these devices.
Early investors in Cornice include the company's founders, management team, and Texas Instruments. In August 2002, the Company received its first venture investment from CIBC Capital Partners, Nokia Venture Partners, and VantagePoint Venture Partners. Privately held, Cornice maintains headquarters in Longmont, Colorado. Visit Cornice at
http://www.corniceco.com/.

Safe Harbor statement under the Private Securities Litigation Reform of 1995: All statements made in this document, other than statements of historical fact, are forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the businesses of the Company and the industries and markets in which the company operates. Those statements are not guarantees of future performance and involve risks, uncertainties and assumptions that will be difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by those forward-looking statements. More information about potential factors that could affect the Company can be found in its most recent Form 10-K, Form 10-Q and other reports and statements filed by e.Digital with the Securities and Exchange Commission (“SEC”). e.Digital disclaims any intent or obligation to update those forward-looking statements, except as otherwise specifically stated by it.

CONTACT:
Cornice: Melissa Kutrubes, [phone] x103, [e-mail]
e.Digital: Jo Ann Platt, [phone], [e-mail]



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