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Digital Lifestyles Group forms strategic relationship with microsoft to deliver world's first teenlifestyle computer and entertainment system

hip-e showcased at Microsoft Consumer Experience Pavilion at 2005 International Consuner Electronics Show (CES)

AUSTIN, TX – January 6, 2005 – Digital Lifestyles Group, Inc.  (OTCBB: DLFG), the creators of hip-e™ – the world’s first lifestyle computer and entertainment system designed exclusively for teens – today announced a strategic relationship with Microsoft Corp. and participation in the Microsoft Consumer Experience (MCX) Partner program.   Digital Lifestyles will be showcased in the Microsoft Partner Pavilion, booth 19C.

“Microsoft approached us to become a participant in its Consumer Experience Partner program due to hip-e being a product and service that adds value to the end consumer experience.  We share a passion to serve consumers with a value-added experience through innovation,” said Kent Savage, President and CEO of Digital Lifestyles Group, Inc. 

“Industry partners are central to Microsoft’s overall consumer strategy,” said Kate Carcelen, Director of the MCX Partner Program at Microsoft.  ”The MCX Partner Program supports industry partners focused on delivering the best-of-breed consumer experiences. 

hip-e delivers on our strategy to help consumers realize their full potential through technology, so they can get more done, stay in touch with friends and family, and have more fun every day.”

The all-in-one hip-e node is the perfect entertainment and communication center for a teen’s room.  The node is used in conjunction with Windows XP Home Edition and the hip-e hangout, delivering a simple, fun and safe experience for instant messaging, music and videos, television and movies, online shopping, homework, and more.

The hip-e lifestyle computer and entertainment system can be ordered at www.hip-e.com, 1-877-hip-e4me, and www.amazon.com.

About Digital Lifestyles Group, Inc.

Digital Lifestyles Group, Inc. designs, manufactures and markets digital lifestyle products, including software, personal computers, accessories and entertainment and communication solutions. Our products include hip-e™, the first digital lifestyle computer and entertainment system for teens, and the Northgate® line of desktop and notebook computers for consumer, business and education customers. We sell our products through our online stores (www.hip-e.com, www.northgate.com), direct sales force, third-party resellers and retail stores.  More information about Digital Lifestyles Group is available at www.dig-life.com

Forward-looking Statements

This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to significant risks and uncertainties. Although the Company believes that the expectations reflected in its forward-looking statements are reasonable, the Company can give no assurance that such expectations or any of the forward-looking statements will prove to be correct, and future results may differ materially from those discussed in this press release. Important information regarding the factors that may affect the Company's future performance is included in its public reports that it files with the Securities and Exchange Commission. The Company disclaims any intention or obligation to revise any forward-looking statements, whether as a result of new information, future event, change in expectations, conditions or circumstances, or otherwise. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statement are material.