e.Digital, APS Partner To Develop and Market Portable, Customizable Entertainment System For Major Airline

10/24/2002 - e.Digital announced its partnership with Aircraft Protective Systems (APS) to develop and market a portable, hard disk drive-based In-Flight Entertainment, or IFE, system under contract for a leading U.S. airline. APS is in discussions with major motion picture studios to provide content for this device, making it the first portable IFE unit of its kind to be introduced to the airline and travel industry.

The customizable digital video player will feature a variety of entertainment options, including movies, TV shows, and music from which the customer can choose. Passengers will be able to reserve one of these units when they book their flight and can use it while waiting for their flight at the gate as well as on board the plane.

The agreement between APS, and the major U.S. airline calls for e.Digital to manufacture and sell the units through APS, a certified airline service and equipment provider. e.Digital has already received its first payment under the contract, and will receive revenue from non- recurring and recurring service fees plus licensing fees and royalties on each unit. Completion of the device is anticipated in the first quarter of 2003. This contract represents e.Digital’s first venture into the In-Flight Entertainment industry; the companies are in discussions with other airlines to implement the system.

Bill Boyer, Jr., President of APS, said, "As a certified airline service and equipment provider, we have established key relationships with major airlines. In our business dealings with these airlines we recognized the substantial cost they would have to incur to upgrade their fleets with embedded IFE systems. Beginning with a major U.S. airline, APS and e.Digital are providing the first portable IFE solution to the airline industry at a significantly reduced cost."

According to Harvey Applebaum, Vice President, Non-Theatrical Sales; and Julian Levin, Executive Vice President, Non-Theatrical and Digital Exhibition at Twentieth Century Fox, "We have been in discussions with APS on this cutting-edge technology. It has great potential to provide a new and complementary method of delivering In-Flight Entertainment to passengers. It also has the capability to provide entertainment options for children."

According to Steve Ferguson, Vice President of Sales and Marketing for e.Digital, "The key here is portability. Our product provides the airlines with an alternative to retrofitting their planes with costly embedded In-Flight Entertainment systems. And because it will be a hand-held, customizable device, it will give passengers more entertainment options. It also will give the airlines an advantage in their overall value-added service offerings by providing passengers with personalized entertainment."

Atul Anandpura, Vice President of Research and Development for e.Digital, said, "We are pleased to offer the integration of digital video technology into our already established MicroOSTM-based digital audio player technology. The important criteria for this product are content protection, ease of use, and durability. e.Digital's engineers are well versed with these requirements, and we look forward to bringing about this revolutionary solution for In-Flight Entertainment."

The U.S. Department of Transportation reports that U.S. and foreign air carriers transported 139 million passengers between the U.S. and the rest of the world in 2001. That number indicates the tremendous potential for IFE, given the fact that international flights represent the largest IFE audience.

Revenues in the IFE industry are also predicted to skyrocket in the next decade. The total revenue of IFE in 2000 (including content, hardware, telecommunication and service revenue) is estimated to have been around $2.21 billion--a nine per cent increase from the previous year--compared with just $500 million in 1992, according to market research journal Screen Digest. Furthermore, Boeing estimates that the market for in-flight TV and Internet access will grow to $70 billion over the next 10 years.

About APS
APS, Inc. is a privately owned, Tacoma, Washington-based company. A certified airline equipment and service provider, APS provides solutions, industrial design, and manufacturing services for companies who have specialized product needs.

About e.Digital
e.Digital Corporation designs, licenses, brands, manufactures, and sells digital audio products and technologies. The company's trademarked digital audio players include the MXPTM 100, TreóTM portable digital jukebox line, SilhouetteTM ultra-slim MP3-CD player, and OdysseyTM line of flash- and hard disk drive- based players. e.Digital launched WeDigMusic.com to complement its digital audio players by providing consumers with a one-stop-shop for streaming and downloading music from thousands of artists on the Web. The company also 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, voice and video players/recorders, and automotive infotainment and telematics systems. Other applications for e.Digital’s technology include 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 MicroOSTM file management system to custom software and hardware development, industrial design, and manufacturing services.

e.Digital is a trademark of e.Digital Corporation.

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