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Frost & Sullivan confirms digEcor's market leadership

SPRINGVILLE, Utah (February 10, 2009) - Following a year of new sales and repeat customer orders, more good news for digEcor, Inc. came from market research and growth strategy firm Frost & Sullivan. After an exhaustive market study analyzing market penetration for each handheld IFE supplier, researchers concluded that digEcor maintains leadership in the portable IFE market.

Market Survey and Results

"Whether evaluating the number of airline customers or the number of players being used in-flight today, digEcor has more of the handheld market than any other company in the industry. With the high cost of embedded systems and the aging of many fleets, the low cost of a portable player is very attractive and handhelds are clearly gaining market share in the total IFE market as well," reported the research team from Frost & Sullivan.

President and COO Brad Heckel commented, "Having validated by a respected third party that we have retained our market leadership position since we created the portable IFE industry is gratifying. With this great momentum, we have been working tirelessly to solidify our plans for the future in order to consistently deliver to the marketplace an IFE experience that drives value to end users and cost savings to airlines. With the world economy on unstable ground, consumer confidence declining, and airline profit margins slipping, having a solution that exceeds First class expectations and provides an IFE rental opportunity to Economy class is an essential component to any airline's competitive strategy. digEcor will continue to partner with airlines to provide a premier solution at a low cost."

Adam Williams, Director of Marketing, further elaborated, "Much of the value of the Frost & Sullivan report lies in the methodology used. The researchers didn't consult IFE providers or just data mine software packages but Frost & Sullivan spoke with airline representatives worldwide to acquire accurate and candid feedback on many variables including brand image, ongoing airline concerns, and market share of each handheld provider."

The team at digEcor firmly believes in the value proposition of renting IFE. Many of digEcor's clients provide AVOD via the digEplayer free of charge to First or Business class customers. Economy class passengers have the opportunity to rent a player for a small, nominal charge. Patrick Drury, traveling last Fall, reflected, "First of all - the digEplayers are a Godsend for lengthy flights…My brother and his wife had flown on American Airlines. When I described what was available to us on the digEplayers and the cost, they were very jealous. They had one movie playing on one screen, and you either plugged in your own headset or rented a headset on the flight. If you had already seen the movie - which they had since it had been released some time ago - you were out of luck. I told them about the selection of movies - old and new, the television shows, the music, the music videos, the games, the whole package. Totally worth the $10 each to rent." The same airline on which Mr. Drury flew often sees 100% of players onboard rented out on several routes, finding that the revenue stream allows for the successful, self-funding operation of a portable IFE solution.

2008 In Brief

Although the global economy slowed in 2008, digEcor still realized sales of digEplayer 5500s and digEplayer XTs. Heckel remarked, "The digEplayer 5500 entered the market more than four years ago and is still satisfying airlines and travelers alike resulting in a significant number of our tried and true digEplayer 5500s being sold to existing clients in 2008."

Additionally, clients continued to add digEplayer XTs, digEcor's premier product, to their fleet as late as December. The increase in sales to current customers came as a result of the profitable operation on existing routes. "Many airlines have watched to see whether or not portables would become a viable solution for the needs of airlines, such as low upfront capital requirements, non-ticket or ancillary revenue, and simplified logistics for low impact on current operations. In 2008, we were able to prove to ourselves, our clients, and ultimately the market that digEcor has the experience and resources to provide innovative solutions and maintain our foothold as a global supplier of IFE," confidently stated CEO Brent Wood.

Regarding the ongoing legal case with competitor e.Digital, mediation resulted in a number of counter claims being dropped by e.Digital. Under court supervised mediation, executives from both companies met last November to work through several of the issues. After presenting evidence and discussing options, e.Digital opted to drop most of its counter claims permanently. Meaning, the claims cannot be resurrected at any point in the future. All of digEcor's claims remain.

Expectations for 2009

Anticipating an important year, Heckel enthusiastically expressed, "We have spent considerable time evaluating our current mode of operations and preparing a strategic framework to guide our plans for 2009 as well as for the next several years. Leveraging our experienced and knowledgeable staff in conjunction with a specific strategy for further market penetration, we expect 2009 to be a decisive year in digEcor's development. We invite everyone to take a look again at the value that we offer as a global leader."

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