ZVUE Announces the ZVUE Spirit Player

ZVUE has introduced the ZVUE Spirit, a patriotic-themed mp3 player pre-loaded with classic, popular patriotic-themed songs from popular artists. The player is planned to ship during May and be available in retail stores in time for Memorial Day weekend. A major national retailer has placed an order for more than 38,000 units which alone is expected to generate a substantial year-over-year increase in second quarter revenues and gross margin for the Company.

The ZVUE Spirit player is the first in a series of planned value-based handheld players featuring the latest in product design pre-packaged with compelling special-themed digital content from leading content providers. These new players will be sourced entirely through OEM manufacturing relationships while being designed and marketed by the ZVUE products team. The Company anticipates its handheld player revenues and unit sales will more than double in 2008. The projected growth should result in significant increases in gross margin for the ZVUE Products business in 2008 based on expected price points and volume levels.

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