I/OMagic Press Release

I/OMagic Adds New Portable Storage Device, the GigaBank Elite 40, to its Product Line-Up

IRVINE, Calif.—(BUSINESS WIRE)—Jan. 5, 2005—New GigaBank(TM) Elite 40 has up to 40GB of Storage Space and a Single-Touch Data Back-up Function

I/OMagic Corporation (OTCBB:IOMG), a provider of data storage and digital entertainment products, announced today the latest addition to its line of portable storage devices, the new GigaBank(TM) Elite 40. The GigaBank(TM) Elite 40 features up to 40 GB(a) of storage capacity within a 1.8” IDE hard disk drive (HDD). Highlights include its single-touch data back-up function, the fact that it requires no batteries, adapters or installation software, and that it is compact enough to fit in your pocket.

“The GigaBank(TM) Elite 40 is perfect for the mobile professional. With a single-touch users can easily back-up a computer, store important files, save and transport digital photos and MP3s or transfer files from one computer to another,” said Tony Andrews, Vice President of Engineering and Product Development for I/OMagic Corporation.

The I/OMagic GigaBank(TM) Elite 40 is powered through the use of a built-in USB 2.0 connector (it is also USB 1.1 backwards compatible), which can be stored in the drive enclosure when it is not in use. It also comes with a simulated leather and chrome case, and is hot swappable (a device that can be plugged/unplugged into a computer while the computer is on). The GigaBank(TM) Elite 40 supports Windows XP/2000/ME/98SE.

I/OMagic anticipates shipping its new GigaBank(TM) Elite 40 to Office Depot stores in January 2005 with an introductory suggested retail price of $229.99.

I/OMagic also offers the GigaBank(TM) 2.2, currently available at Circuit City and Staples stores, and the GigaBank(TM) 4.0 available at Circuit City, Staples, and Office Depot stores.

(a) Note: 1 MB = 1 million bytes, 1 GB = 1 billion bytes.

A user’s total accessible memory/storage/data capacity will be less than stated as a result of the user’s operating system and other factors.

About I/OMagic
I/OMagic provides data storage products (such as CD-RW drives, DVD+/-RW and floppy drives, including its MediaStation and DataStation products) and digital entertainment products (such as MP3 players, digital audio headphones and its Digital Photo Library(TM) system, which is a palm-sized portable external hard drive for digital music, photo and movie storage, as well as a line of EasyPrint(TM) digital photo accessories). The Company sells products under three brand names—I/OMagic(R), Hi-Val(R) and Digital Research Technologies(R)—through nationally-recognized computer, consumer electronics and office supply superstores and other retailers, such as Best Buy, Circuit City, CompUSA, Fred Meyer Stores, Microcenter, Office Depot, RadioShack, Staples and Target stores, as well as catalogue companies and Internet retailers such as Buy.com, PC Mall, Tiger Direct and Dell.

Forward-looking statements in this release with respect to the anticipated shipment and sale date and price of the Company’s new GigaBank(TM) Elite 40 device as well as product performance and consumer reactions to this product are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties including, but not limited to, the company’s dependence on the PC and consumer electronics industries and on product lines based on new technologies; the company’s ability to develop new products based on new or evolving technology and the market’s acceptance of those products; manufacturing capacity, availability and reliability; competition and pricing pressures in the technology industry; general economic and business conditions; and other risks detailed from time to time in the Company’s periodic reports filed with the Securities and Exchange Commission.