Iomega Announces Retail Launch Of Revolutionary HipZip(TM) Digital Audio Player

Market Wire, September, 2000

Iomega Corporation (NYSE: IOM), a global leader in data management solutions, today announced the retail launch of the HipZip(TM) digital audio player, a sleek new device that combines affordable music storage with support for licensed digital downloads of copyrighted music and spoken word content.

The HipZip(TM) digital audio player, available nationwide September 24, plays music stored on Iomega's PocketZip(TM) 40MB disks and radically lowers the cost of creating portable personal music collections. Additionally, the HipZip player utilizes Microsoft's Windows Media(TM) Format (WMA) and digital rights management (DRM) technology and other DRM technologies to secure commercial music content to PocketZip disks, offering artists and publishers protection from the unauthorized distribution of commercial content.

"This is a major breakthrough in digital audio and gives consumers the ability to buy the music they want at the price they want to pay," said Bruce Albertson, president and CEO, Iomega Corporation. "We applaud Microsoft and other DRM providers for helping expand the market for the legal distribution of online music. We believe that the combination of affordable storage, in the form of Iomega's PocketZip disks, and digital rights management utilizing PocketZip's unique serialized disks will open the doors to rapid growth in the market for digital downloads of commercial content."

PocketZip(TM) Media Offers Consumers Affordable Alternative Iomega's PocketZip(TM) 40MB disks break the price barrier for digital audio storage, providing an affordable new alternative to the costly flash memory cards that have limited the widespread consumer adoption of MP3 and other digital audio players. Formerly marketed under the Clik! trademark, PocketZip disks are approximately one-quarter of the size of CD audio discs, are encased in a metal shell for better durability than a CD, store more minutes of music than a CD using the Microsoft Windows Media(TM) Format, and are serialized to enable the digital rights management (DRM) of licensed content. PocketZip disks incorporate the same technology as Iomega's award-winning Zip(R) disks.

Iomega estimates that consumers build a media library averaging 20 disks in the first year after they adopt a new music format. With the HipZip(TM) player, that 20-disk collection has a media cost of about $200, or $10 per PocketZip(TM) disk. Building an equivalent music collection with solid-state memory cards in the MP3 format, the sole format used in approximately 75 percent of players on the market today , would take twice the storage space compared to files in Microsoft Windows Media(TM) Format and would cost nearly $4,000, well beyond the reach of many consumers. With PocketZip-based players like HipZip, consumers can now build affordable digital music collections.

"Iomega is strategically positioned to play a leading role in the new consumer electronics marketplace with the introduction of PocketZip technology, an affordable and easy-to-use storage solution," said Albertson. "The recognition of PocketZip by a growing number of content providers and manufacturers signals widespread acceptance for this format."

Windows Media Player 7 Selected Microsoft Windows Media(TM) Player 7 has been selected to be the default Windows-based PC jukebox to be included in every HipZip(TM) box. Windows Media Player 7 delivers a complete, all-in-one experience, including digital audio and video playback, a jukebox, an Internet radio tuner, an integrated media guide, audio CD creation, and one-click transfer of digital music to portable devices. Microsoft Windows Media Player 7 ends user confusion and the need to use several products to perform the most common digital media activities. Using the Microsoft Windows Media Format, combined with Windows Media Player 7's integrated one-click transfer feature for portable music devices, the HipZip player can store about 80 minutes of digital music and other audio content on each 40MB PocketZip(TM) disk. Together, Iomega's PocketZip technology and Microsoft Windows Media(TM) Rights Manager offer the first affordable, portable solution for supporting secure digital music, bringing Internet delivery of digital content from top artists to consumers and enabling viable digital music e-commerce.

"HipZip and the PocketZip technology take digital music affordability to a new level," said Dave Fester, general manager, Digital Media Division, Microsoft Corporation. "Consumers using PocketZip combined with Windows Media's CD quality sound and superior file compression can now store their whole music collection for a fraction of the cost of other portable media."

Iomega Garners Industry Support for PocketZip(TM) Platform The following content providers from the music, publishing and software industries have announced their support for the PocketZip(TM) platform:

EMI Recorded Music "Iomega's exciting PocketZip disk offers music labels the very real potential of a secure format for downloading and locking content to one location while creating an equitable transaction between content owner and user," said Ted Cohen, vice president of new media, EMI Recorded Music.