Pepper Computer Announces Major Software and Hardware Enhancements For the Pepper Pad; Company also signs licensing agreement with OEM HANBiT

LEXINGTON, Mass.--(BUSINESS WIRE)--Jan. 3, 2006--Pepper Computer, Inc., today announced important new developments in software, hardware, and licensing for its innovative Pepper Pad(TM). The Pepper Pad is the handheld media computer that enables consumers to hold in their own two hands the world of digital media and broadband services. Full texts of the announcements are available at http://www.pepper.com/press/pr.html.

Software: Pepper announced a new version of software for the Pepper Pad that brings users major new capabilities - such as integration with Yahoo!'s Flickr photo-sharing community, Mobipocket's eBook reader and the TitanTV program guide - while giving the Pad quicker performance. Version 2.1 will be delivered on Pads shipping later this month and will be available to existing Pad owners through Pepper's software update button for free. Both the Mobipocket eBook and Flickr photo-sharing applications can also be accessed using the Pepper Desktop software for PCs.

Hardware: The company announced the Pepper Pad Plus, an enhanced version of its Pepper Pad handheld media computer. New hardware features include: a new battery with more than 60 percent greater capacity; Wi-Fi 802.11g; a 30-gigabyte hard disk; and Bluetooth 2.0. The Pad Plus will also include a new software revision that will include: SIP-based Internet telephony (VoIP); Windows Media 9 Series audio and video; plus Universal Plug and Play (UPnP), which enables the Pad to stream music, photos and videos from other UPnP devices and PCs. The new Pepper Pad Plus will be available in the second quarter. There will be an upgrade program for existing Pepper Pad owners to obtain the new hardware features. Current Pepper Pad owners will be able to upgrade to the new software for free using the Get Updates button included in the existing software.

OEM licensing: Pepper announced that it has licensed its software and its hardware designs to HANBiT Electronics Co., Ltd. of Suwon, South Korea, enabling HANBiT to produce the award-winning Pepper Pad handheld media computer. Under the licensing agreement, HANBiT will manufacture and distribute the Pads under the Pepper brand worldwide. It is the first agreement that Pepper has signed with a consumer electronics OEM, one of the four primary distribution channels for the Pad. The other distribution channels are retailers, broadband providers and home automation and home control companies.

The Pepper Pad is the only product that gives consumers easy, portable access to the world of digital media and broadband services. At just 2.3 lbs., less than one inch thick, rugged and splash resistant, the Pepper Pad is perfect for the family room, the kitchen counter, the bedside table, the coffee shop or just about anywhere. U.S. customers can buy the Pepper Pad through Amazon.com, BestBuy.com and eCost.com at $849.99 (MSRP); European and Canadian customers can order Pepper Pads at Pepper.com. Pepper is offering a $50 rebate by mail for Pads purchased by January 31, 2006.

The Pepper Pad is a lightweight, Wi-Fi-enabled device, with a large, high-resolution screen, 20-gigabyte hard disk, built-in speakers and a thumb keypad, providing a powerful, versatile platform for a much wider range of online and off-line activities than any other portable device. Its 8.4-inch display is ideal for viewing full-width Web pages and watching full-screen videos. The Pepper Pad can store hours of music and videos, plus thousands of photos. And, with three forms of wireless communication - Wi-Fi, Bluetooth and infrared (IR) - the Pad can access and control a wide range of devices around the home, from Wi-Fi access points, to TVs, set-top boxes, music systems, home theaters and media servers. It's an ideal way for consumers to have Internet and media access plus wireless remote control in every room of their home.

The Pepper Pad can be used anywhere, with or without Wi-Fi. Consumers can take advantage of home networks and public wireless hotspots for access to online services, or offline, they can play digital media they've saved on the Pad's built-in hard disk. The Pepper Pad is fully functional and ready to use right out of the box. It offers a far richer viewing experience than small-screen PDAs or mobile phones. The Pad is water-resistant and comes with a rechargeable lithium polymer battery with advanced power management.

The Pepper Pad has an SVGA TFT LCD screen with an 800 X 600 resolution and resistive touch screen. The system is based on a 624-MHz Intel PXA270 application processor, Intel 2700G media processor and 256 MB of SDRAM. The Wi-Fi is complemented by Bluetooth, IR, SD/MMC card slot and a USB port. It also features built-in stereo speakers and microphone, jacks for headphones, external microphone and external video display, plus a direction-pad and scroll wheel for navigation. It has two options for easy and reliable text entry: a built-in lighted thumb-style QWERTY keypad or a separate (optional) keyboard connected wirelessly by Bluetooth or wired via USB.

About Pepper Computer

Pepper Computer, Inc. (www.pepper.com) is a digital home software and technology company that creates and markets a handheld media computer platform that includes software, hardware designs and services, which together deliver a total user experience combining the power of the Internet and the media capabilities of a PC into an easy to use handheld device. Founded in January 2002, the company's mission is to make consumer technology enjoyable to use and a pleasure to own. The company is privately held and headquartered in Lexington, MA.

For additional Pepper press information contact:

Mark Metzger

Metzger Communications

781-648-2564

mmetzger@metzgerco.com

Pepper and Pepper Pad are trademarks of Pepper Computer, Inc. Other brand names or product names are trademarks or registered trademarks of their respective owners.