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The "Freedom" of Virtual Displays
1/30/2006


Remarks by Steve Willey, President of Sales and Marketing for Asia:

Thanks very much for providing us this opportunity to talk about what we're doing and how we could significantly effect our industry. The major message this evening is that as humans we consume multimedia. We're at the point now in the evolution of handsets that there's the opportunity to provide high quality multimedia to the mobile user. We believe strongly that if improvements are not made to the interface of a handset, specifically the 2" screen that we're all very much aware of, that some of these opportunities will be deleveraged. In order for consumers to value highly the multimedia that's going to be resident in a handset, and in order for them to justify paying for it, we would argue that the interface must be improved. We're here this evening with Randy Sprague, our director of technology and Shigeru Shinzawa who's a resident of Tokyo.

The World's Smallest Color Display

I included this because this came in the mail about a week ago. This company's claim to fame is an mp3 player with the world's smallest color display, an inch and a half by an inch and a half or something. Microvision is on the other end of the spectrum; we're looking to make the display as large as possible and hence the title of this presentation, the Freedom of Virtual Displays. We're not interested at all in very small displays. We're interested in very big multimedia experiences.

Mobile Multimedia

So from the standpoint of mobile multimedia, what appears to be obvious to everyone is that the device needs to be as small as possible. Portable, personal, pocketable. But at the same time, with the increasing availability of downloadable multimedia, you'd also like to maximize that multimedia impact. That means you'd like a display that has tremendous color, resolution and dynamic range. There's a conflict obviously. How do I get a device that's that small and how do I get an experience that's that big, to justify paying for that experience. That's become the business of Microvision. Microvision has other activities in the medical and industrial markets. In the consumer space, Microvision is entirely focused on the interface to the handset. Our role is that delivery of these multimedia experiences to the user. And I'll describe that in more detail.

The Human Being - a Consumer of Multimedia Experiences

So a little bit about the human being and the way we're wired. We really are a consumer of multimedia experiences. We go to the cinema and will pay for that privilege, because it's a big impact, a big experience. People want ever larger TVs and desktop monitors, they like that experience. Advertisers will pay a lot more for a full page print ad or full page web ad. And this is not surprising, going back to the days of the caveman, we've always depended on our eyesight for safety. And as a result, our visual bandwidth is 20x greater than our audio bandwidth. So if we want to maximize this experience, this impact, this excitement, what we should look at is maximizing the visual experience.

Supporting Evidence from recent Las Vegas Consumer Electronics Show

Relating to that comment about the visual experience, displays dominated the CES show. This was the year of the display. Convergence has finally happened in a very complete way. Web, games, cameras, TVs can be mixed and matched in a large number of ways and we can count on that going forward. There are now 3 universal platforms, the PC is a strong platform. The console player is the living room entertainment player. The third is the handset - a universal platform looking for applications. Digital content, we can expect that to be available on any of the platforms.

Opportunity for the Mobile Industry

We now have convergence, standard platforms, content available, what do we do with it? We try to create opportunites to deliver and sell these services to the consumer, in the mobile space. Our task is delivery. It's not good enough to be creating multimedia, but delivery is a vital piece to it. We make the comment that we need to unlock the power of these multimedia devices. Whether they be handset, game players, iPods or otherwise, if everything's limited to the 2" screen, the opportunuty to give the consumer an experience they will pay for is limited.

Handset Platform "Dilemma"

This is the dilemma. The handset is getting more exciting. There's a Nokia phone with 4GB hard drive, moving to 8GB. With 3G, and 3.5G, obviously we've got bandwidth. Everything you could ask for, we've even got some interesting applications such as mobile TV. In the US, there's a shift to thinking of mobile phones as handsets with multimedia content.

The dilemma that people are recognizing is that people are not going to go to a larger cell phone. Maybe there's a tradeoff as to what people can expect from a small phone. If you have a small display and you're looking at a soccer player, football player, and you're looking at a 1" display, it's almost like a cartoon, so small there's no benefit. If you use a QVGA display, you can see that there's some things going on but you're not quite sure what. If you move that to an SVGA display, you can see the opportunity immediately to create an experience that is valuable.

Who would benefit from a "Big Screen" Handset Experience?

So if you could get from a 2" screen to a desktop screen in a handset, who would benefit? Consumers would benefit, they'd get the experience they're used to. Handset manufactures, they like this, there's a new generation of handsets and accesories. Carriers would be able to offer high-value, premium priced services. Content providers and there's someone from Disney here today, and this screen that is facilitated by this gateway, this becomes the 4th screen to leverage their assets, Cinema, PC, TV and Mobile Phone. Handsets should not diminish content value.

Heart of the Display: MEMS Scanner

Let's say you want a larger screen. We want a better, more valuable experience, how do we do it? We can make the screen physically larger, which makes the handset larger, and that's a non-starter. Or we can create an illusion. Microvision creates a large screen illusion from a small package. Two ways we do this, either through eyewear or some form of projector. The Picoprojector is a very small device that connects to your mobile device and enables a bigger experience. Microvision has a heavily patented system that uses a MEMS scanner. Microvision builds displays, but not flat panel displays or LCD displays. Our displays are very different. The core to our display is this mirror that moves really quickly. Our solution has low power, low voltage and highly reliable.

The Microvision Difference

A traditional desktop quality display has a half a million pixels. In our world, we take a red, green and blue light, combine them and bounce them off a millimeter mirror and that creates an illusion, a virtual display which can be worn as eyewear or that display is a microprojector.

Microvision Projector Configurations

Personal eyewear, people expect HD quality in their handset displays. Plasma quality. Projector, something about the size of a mobile phone, HD quality. The projector can be built into the phone itself.

Microvision is in the virtual display business. One of our business units relates to industrial markets, here's a mechanic looking at a virtual display in a work environment. We take that technology and apply it to the consumer and mobility markets. Our sense is that this display will have to be HD resolution. Eyewear would have to be stylish, comfortable and cool, have good battery life and be well under $500. Microvision recognizes that we need to bring a premium quality product to the market at a consumer price.

This is all the ways people failed in the past, they took a small flat panel and put a magnifying glass in front of it and made it wearable. It looks ugly and it's uncomfortable, and people just don't accept it. Eyewear has to be stylish, comfortable and priced right.

We anticipate first generation displays coming to market over the next 2 years. With recognition of the problem of 2" display, people will start to experiment with wearable displays. We'll see the product improve over the next couple of years, and eventually wearable displays and projector displays will become a standard and the norm.

After describing the virtual display, here's a virtual keyboard from a company called iTech. What's interesting is if you start combining a virtual keyboard with a virtual display. A very interesting place for Microvision to play, you may see us participate in both sides of the interface.

Presentation Summary

In summary, it's up to ourselves as the industry to manage the consumer experience. There is the risk of having fantastic multimedia available, but we don't want to disappoint consumers with the 2" screen. All the underpinnings are there, the convergenece, the universality of the platform.

Finally, Microvision is in Japan for a reason. Our products are radical and new. We believe that our greatest opportunity is to work in Japan, with Japanese partners, and to introduce these products into the Japanese market. So thank you very much for the opportunity this evening to discuss this with you. Thank you.

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