At $99, the current ZVUE is priced at one-third the price of the least expensive video iPod, while the next-generation ZVUE (pre-announced on Monday) will be priced at $149, less than half the iPod video player price

HandHeld Entertainment(TM), one of the pioneers in the portable video marketplace, today issued the following statement regarding Apple Computer's forthcoming video iPod.

"We welcome Apple and Mr. Jobs to a market that we pioneered," said Jeff Oscodar, president and chief executive officer of HandHeld Entertainment. "Years ago, we knew that people wanted to watch video on handheld devices and we have been satisfying that demand. Apple's announcement earlier today about its plans to begin shipping an iPod video player validates our vision.

"Apple's iPod product line is certainly in flux -- or should I say it's in a 'Shuffle?' I wonder how Nano purchasers feel now. We at HandHeld Entertainment don't treat our customers with such disregard. That's why we are introducing a complete ZVUE(TM) family of portable video devices at CES this coming January. That way, consumers can be free to choose the product that's best for them.

"And one more thing, our products are affordable. All of the products in the ZVUE product family will cost less than the cheapest iPod that supports video."

HandHeld Entertainment announced a next-generation ZVUE on Monday of this week, a device that will have a manufacturer's suggested retail price of $149, less than half the vPod's SRP. The next-generation ZVUE will feature on-board flash memory, a rechargeable lithium-ion battery, and be compatible with Windows Media Video (WMV) and Windows Media Audio (WMA) through the use of Microsoft's secure Digital Rights Management (DRM) software. (See a copy of the news release at http://www.hheld.com/news/20051010.html.)

HandHeld Entertainment announced its first ZVUE in mid-2003 with a $99 price point and shipped its first units before Christmas 2003. Version 1.1 is currently available online and in more than 1,500 retailers throughout the United States, including selected Wal-Mart stores and Discovery Channel Store locations nationwide.

The next-generation ZVUE (visit http://ftp.hheld.com/zvue_photos/ for digital photos) will utilize a thinner housing than the original ZVUE and will be available in new colors. HandHeld will publicly unveil the next-generation ZVUE in January at the 2006 Consumer Electronics Show held in Las Vegas. The company plans to have multiple ZVUE models available for purchase in 2006, including both the original and the next-generation ZVUE models.

ZVUEs give digital media lovers the ability to take their favorite video, audio and digital picture content on-the-go by simply downloading films and music from the ZVUE download Web site, http://www.zvue.com/downloads/ and other content sites. About the size of a pack of playing cards, the highly-portable ZVUE plays videos, music and audio files that can be taken anywhere, any time.

About HandHeld Entertainment

HandHeld Entertainment is the world's first portable digital entertainment company to offer mass-market portable media players at mass-market prices via mass-market distribution at more than 1,500 retail locations across the United States. ZVUE users can download thousands of free media titles at www.zvue.com/downloads. For more information, visit http://www.zvue.com or call 415-495-6470.

HandHeld Entertainment and ZVUE are trademarks of HandHeld Entertainment.