Eclipse Showcases In-Car Infotainment System Designed and Developed by e.Digital

LAS VEGAS--Jan. 7, 2004--e.Digital Corp. (OTC: EDIG) today announced that Eclipse will showcase the HD1213 during the 2004 International Consumer Electronics Show in Las Vegas. The HD1213 is a 20-gigabyte hard disk drive "infotainment" system that integrates information, communication and entertainment into a sophisticated, easy-to-use device. With specifications provided by Eclipse, the HD 1213 was designed and developed by e.Digital utilizing the company's proprietary MicroOS(TM) technology.

The HD 1213 plays multiple digital audio formats including MP3, WMA and WAV, and serves as a mass storage device for the storage and transfer of multiple file formats. This includes a multi-format audio write-back feature providing Eclipse customers the ability to capture and replay any audio content including: AM, FM, CD, MP3 and satellite radio (aired within the previous five minutes). The HD 1213 is compatible with all Eclipse head unit models currently available.

"After many months of working with Eclipse, we are pleased to see the HD 1213 coming to market," commented Fred Falk, president and chief executive officer of e.Digital. "The HD 1213 delivers a full feature set of integrated digital infotainment for a growing number of consumers desiring to transfer the home entertainment experience to their automobiles."

"The Eclipse line of products delivers mobile entertainment solutions coupled with the best of home entertainment technology," said Vannin Gale, senior R&D manager of Eclipse. "Through e.Digital's design and development, the HD 1213 achieves outstanding system performance enhancing our current product line and continues our tradition of excellence."

Eclipse will accept pre-sale orders at booth 1822 during CES for the HD 1213.

About e.Digital Corp.: e.Digital Corp. 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(TM) 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(TM) file management system to custom software and hardware development, industrial design and manufacturing services. For more information about e.digital and its products, visit the company Web site at www.edigital.com.

About Eclipse: Eclipse, a division of Fujitsu Ten, delivers sound quality in mobile electronics comparable to that of home systems in the areas of Tuners/CD Players, Amplifiers, Speakers, DVD visual media and Navigation. Eclipse sells products through a select group of retail partners throughout the U.S. For more information on the company and its products, visit www.eclipse-web.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.