e.Digital Corporation (fka EDIG)

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FOR IMMEDIATE RELEASE


E.DIGITAL CORPORATION AND DIVXNETWORKS FORM STRATEGIC PARTNERSHIP TO DESIGN AND DEVELOP DIVX VIDEO DEVICES

Agreement will Enable Consumer Electronics Devices to Integrate and Playback Wildly Popular DivX Video for the First Time


(SAN DIEGO, CA - April 9, 2002) - e.Digital Corporation (OTC: EDIG), a global provider of comprehensive digital product development and designs, and DivXNetworks, Inc., the company that created the revolutionary patent-pending DivX(TM) MPEG-4 compatible video compression technology, today announced a strategic partnership to jointly develop and market a range of consumer electronics devices that play back DivX video.

The agreement will enable the creation of a number of DivX Certified hardware devices, including handheld DivX video players, DivX-enabled DVD players, home video jukeboxes, Digital Video Recorders, digital set-top boxes, digital video cameras, and more. Additionally, the two companies will work together to integrate digital rights management (DRM) technology into the devices to ensure secure playback of high-quality digital video. DivX is a leading MPEG-4 compatible video compression technology, with over 50 million users worldwide.

"This partnership is a key step in our hardware strategy to integrate DivX technology across a range of next-generation convergence devices," said Jordan Greenhall, CEO and co-founder of DivXNetworks. "Our enthusiastic user base has been clamoring for hardware solutions that leverage the power of DivX video, and by working closely with e.Digital we will be able to meet that demand for the first time. e.Digital's demonstrated capabilities in product development, manufacturing and supply chain management, life cycle support and growing retail presence provides us with an opportunity to bring state-of-the-art technologies to market in a series of absolutely cutting-edge products.

Greenhall continued, "DivX has already established itself as the most popular and efficient video technology for IP networks, and the first line of high-quality, secure consumer electronics devices specifically optimized for DivX video will extend the DivX experience beyond the PC, ultimately benefiting consumers and content providers alike. We feel that e.Digital's applications integration capabilities provide an excellent complement to our advanced video concepts. Their experience with digital rights management and secure content applications will provide a real strength in developing the DivX video standard."

"We are very excited to work together with DivXNetworks to design and develop a line of DivX Certified CE devices that provide consumers with the quality and convenience of DVD-quality digital video while offering state-of-the-art digital rights management technology for content providers," said Steve Ferguson, Vice President of Business Development for e.Digital. "There is a clear market demand for hardware devices that allow consumers to easily store and playback high-quality digital video, from portable video players and home entertainment/networking centers to portable video players to next-generation DVRs and automotive telematics products. To meet demand we will develop not only e.Digital-branded products but also designs that will be available to OEM and/or ODM customers."

Jim Collier, President and COO of e.Digital added, "I don't think that it's possible to overestimate the importance of DivX video technology and the global influence it will have on entertainment media. It holds the promise to be to video what MP3 compression technology has been to audio, but on a much wider and far reaching scale. Its potential to become a streaming video standard, and its applications for use in portable video products, home network entertainment and storage systems, as well as automotive telematics applications make it one of the golden technologies of the decade. The synergy between our two companies is incredible and the potential for cross platform technology convergence is enormous. We are excited about this long-term relationship and the many opportunities that it provides."

e.Digital and DivXNetworks will jointly develop and market the hardware devices, with the first product expected to be available by the end of the year. e.Digital has created a complete line of portable audio devices, and DivX video compression technology has become the de facto standard for high-quality IP video, with over 50 million downloads and an average of over 2 million downloads per month. The proprietary DivX Digital Rights Management (DRM) solution provides authentication, authorization, encryption, fingerprinting, multiple watermarking techniques and business rule management to ensure the protected delivery of IP video.


About DivXNetworks

DivXNetworks is a leading technology company that enables the rapid proliferation of video content over Internet Protocol (IP) networks by combining the lightweight, ubiquitous access of the Internet with DVD-quality video performance. The company's approach is built upon the success of the DivX(TM) codec, a leading standard for MPEG-4 video distribution with over 50 million users worldwide, and the DivX Open Video System(TM), a next-generation content delivery system that provides unsurpassed aggregation, promotion, and distribution of video content for mass markets. DivXNetworks is headquartered in San Diego, California, with a satellite office in Los Angeles. For more information about DivXNetworks, visit http://www.divxnetworks.com.


About e.Digital

e.Digital Corporation offers an engineering partnership for the world's leading electronics companies to link portable digital devices to PCs and the Internet. e.Digital develops and markets to consumer electronics manufacturers complete end-to-end solutions for delivery and management of open and secure digital media with a focus on music players/recorders and portable digital voice recorders. Engineering services range from the licensing of e.Digital's patented MicroOS(TM) file management system to custom software and hardware development, industrial design and manufacturing services. For more information on the company, please visit www.edig.com.