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Technology Stocks : e.Digital Corporation(EDIG) - Embedded Digital Technology -- Ignore unavailable to you. Want to Upgrade?

To: $Mogul who wrote (7177)	8/10/1999 10:56:00 PM
From: JimC1997	Read Replies (6) \| Respond to of 18366

I was in New York on some business today so I stopped by the IMX show and caught the EPAC demonstration by Joyce Eastman of Lucent's Bell Labs New Ventures Group. The demonstration did not use an e.Digital player as I had hoped, but rather a conventional PC laptop as the the file source. Side by side comparisons of music from a CD source and an EPAC source convinced most in the audience that the CODEC was superb. Although perhaps one-third of the audience could consistently pick the source accurately, the difference was really very small at the higher compression rate (about 11:1) and essentially non-existent at the lower compression rate (about 9:1). Listening conditions were not ideal (large auditorium room with poor acoustics and sound reproduced from two big speakers at the front) but the audience, composed primarily of music-industry participants and a fair number of e.Digital shareholders, was impressed. Items confirmed at the event: 1. There will definitely be an e.Digital-sourced music player on the market by an OEM for the Christmas holidays, and there is a chance of more than one. Agreements have been made with some details to be worked out shortly. The watermarking selection was one of the last technical issues to be resolved. 2. EPAC is the only CODEC being used in the Madison Project (a joint effort by IBM, Sony, Time-Warner to deliver music on-line in the San Diego area.) EPAC won the compression task in a show-down with other CODECs. 3. Sony Music is very impressed with EPAC, but Sony Electronics may choose to use their inhouse-developed ATRAC CODEC (which Lucent feels is quite good, but not as good as EPAC) in any player they introduce. The door is not closed to e.Digital, however, and management of e.Digital have maintained a regular dialog with Sony for over a year. 4. Lucent is very confident that EPAC will emerge as the standard compression technology due to its superior quality. They indicated that numerous tests (unreleased) have consistently demonstrated that EPAC reproduces sound closer to the CD standard than any other CODEC. Lucent did not feel that any of the other CODECs were even close to their music quality. They also mentioned a number of very well-respected music industry executives who have given EPAC their personal (although private) endorsement. This has aided Lucent in obtaining record label support of EPAC. 5. I believe that all labels will support EPAC, along with the other CODECs and let the consumer market choose the eventual winner. 6. Lucent was quite enthusiastic about the design of the e.Digital portable music player but deferred from making specific comments about when further annoucements would be forthcoming on that element. My personal feeling is that an annoucement will be made in the next two weeks. 7. There was some good-natured banter between representatives of AT&T's a2b CODEC and the EPAC team, but the Lucent position is that the a2b technology is several years behind theirs. 8. Lastly, while Lucent is clearly committed to succeed in this venture and feels confident that it will eventually dominate, they have also adopted a position that they will not enter the consumer marketplace with any product directly. They will work through others, such as the e.Digital/OEM combination, but you will not see a Lucent-branded player on the market. I expect the Haiyaku, MaryinRed, Elmore.j. and Whitesails (all of whom were at the session and I can certify as very nice people, in addition to being astute investors) will be posting their thoughts on the message boards soon. Hope you found this useful. Jim