Today's announcement was made just prior to the annual Consumer Electronics Show, where HandHeld Entertainment will showcase its family of ZVUE portable media players January 5-8, in booth #70454 of the Sands Convention Center in Las Vegas, Nevada.

The new WiFi ZVUE (Model 500) will feature a 3.5-inch LCD screen with 320X240 resolution in a landscape format that supports videos at 30 frames per second (fps). The new WiFi ZVUE also features a minimum of 1GigaByte of on-board Flash memory, both Compact Flash and secure digital/multimedia card slots (SD/MMC), a rechargeable lithium-ion battery and is compatible with Windows Media Video (WMV) and Windows Media Audio (WMA) through the use of Microsoft's secure Digital Rights Management (DRM) software. The company plans to have initial samples of the WiFi ZVUE in February 2006.

"The new WiFi ZVUE will give digital media lovers the ability to download videos and music from virtually anywhere they can connect to a wireless hot spot, without needing to be hooked to a personal computer," said Jeff Oscodar, president and chief executive officer of HandHeld Entertainment. "So whether you're at home, on campus, in a coffee shop, in a fast food restaurant, at a friend's house or on the street, if your ZVUE can 'see' the Internet, you'll be able to grab movies, TV shows, sports shorts, news, music videos, music -- everything you need for 'Media Snacking'(SM).

"Savvy observers will recognize that we've taken the opposite approach from virtually every other PMP manufacturer. We started with a simple, yet revolutionary, Entry Level ZVUE priced at less than $100, and now we're giving customers more for their purchase. For example, last week we announced that we'd added legal downloading capabilities to our $99 ZVUE. This week we're highlighting three new ZVUEs at CES, each more impressive than the other, capped off by our new WiFi ZVUE. And yet, each offers customers exactly what they need with customer-friendly flexibility and pricing."

The WiFi ZVUE will feature a phone-style button pad on the front of the device, along with stop/play/fast-forward/rewind/menu navigation buttons. The new "Third Generation" ZVUEs will measure approximately 3.5- X 5.5- X 0.5-inches (height/width/depth).

Additionally, the "Third Generation" ZVUEs are the first ZVUE devices to support a Compact Flash slot, which allows users to easily add additional storage capacity to their devices. Compact Flash cards are available at up to 8GigaByte (GB) capacities today.

"We've added Compact Flash support to these 'Third Generation' ZVUEs to give our customers the flexibility to add more storage capacity if they choose to do so," Oscodar said. "Unlike some of our competitors in the portable media player marketplace, we want our products to get better over time, not become obsolete. Our upgradeable software and modular hardware insure that a ZVUE purchase today means owning a great product today and an even greater product tomorrow.

"Our storage modularity also acknowledges that people use video differently than audio. For example, people will often listen to the same songs over and over again, which is why we want to store all of our songs on one portable device. However, although videos take up a lot more storage capacity than songs, it's rare that anyone will watch the same movie or video clip over and over again. Instead, what most people do is either grab new videos off the Internet to watch while they're on the road, or they store their most favorite videos on their computers and then download a specific favorite selection to take with them when they want to watch it while they're on the go.

"In addition, not all video is best suited for smaller screens and most that are tend to be shorter clips that fall into what we call the 'Media Snacking' category. Hence, when most device manufacturers stuff their PMPs with storage capacity their customers don't need and really won't use, they're doing their customers a real disservice. We won't take that approach."

The other "Third Generation" ZVUE (Model 400) being announced today is identical to the so-called WiFi ZVUE with the exception that it comes equipped with 512Mbytes of on-board Flash memory, does not have wireless connectivity capabilities and it does not feature a phone-style type keypad.

The new WiFi ZVUE is expected to begin shipping in the second quarter of 2006 with an estimated retail price of less than $300.00.

The new ZVUE 400 is expected to begin shipping in the first quarter of 2006 with an estimated retail price of less than $225.00.

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 http://www.zvue.com/downloads. For more information, visit http://www.zvue.com or http://www.hheld.com or call 415-495-6470. HandHeld Entertainment and ZVUE are trademarks, and Media Snacking is a sales mark, of HandHeld Entertainment.