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Portable device market trends may bode well for Microvision

By Henry Truc Associate Editor

A recent study conducted by executive recruitment firm Korn/Ferry International found that four out of five executives globally stay connected to work through mobile devices, such as cell phones, PDAs, laptops or pagers.

Market researcher In-Stat also reported that the number of video-centric portable media players will grow to 5 million worldwide in 2006, up from 390,000 in 2004.

As mobile applications and content become more resource intensive, businesses that want to tap into the market of handheld video devices will have to churn out higher quality products to stay competitive.

For high resolution-display and imaging systems developer Microvision, Inc. (Nasdaq: MVIS Quotes, News, Charts), the trend translates into opportunity.

"Cellphones and other mobile devices are being filled with new image content and applications including streaming videos and Internet access while there's been little or no change made to improve the viewing experience for the user," said Alex Tokman, President and Chief Executive Officer for Microvision. "This increase in content is driving the cell phone and hand set manufacturers to provide the user with a better viewing experience."

Microvision uses an embedded architecture called an IPM, or integrated photonics module, which is a "tiny image generator for many high-definition consumer, automotive, medical and military display devices" that are developed by original equipment manufacturers [OEM], Tokman said.

Because of its small form factor, the IPM can be integrated into a variety of original equipment manufacturer products that require a large viewing or imaging experience on a small screen.

"We are targeting the IPM for high volume consumers and automotive publications first. These would include miniature projection displays we call Pico Projectors that would be embedded into mobile devices such as cell phones, PDAs or iPods," said Tokman, who assumed his post as CEO only six months ago, and led an overhaul of the Company's senior management team.

Microvision draws its revenue from contracts with commercial OEMs, government agencies, and product sales.

Although the Company’s net loss for the second quarter increased to 38 cents per share, from 23 cents per share last year, and its revenues for the quarter slipped to $1.9 million, compared to $4.7 million a year ago, Tokman said the Company is encouraged by 41 percent increase in its Flic bar code scanner and product line revenue, and the its revitalization efforts.

"Flic is a bar code scanner," Tokman said. "It's simple and affordable and it's targeted for the rapidly emerging mobility market. Flic typically provides a low cost alternative to higher priced competitor products for light duty applications. We recently launched three software products that enable a simple and affordable solution to capturing bar code data for various developers of enterprise solutions."

Tokman expects Flic sales to "considerably" increase over last year.

"Our goal is ambitious, but crystal clear," Tokman said. "We’ve turned the Company around, and I'm very encouraged by what we've accomplished as a team over the first six months of this year. We've rolled out and implemented new business strategies, we organized the operations, revamped the leadership team, reconstituted the board of directors, and completed the largest financing in the history of Microvision. We will continue this positive momentum started in the first half and hopefully translate all the internal improvements we made over the last six months into tangible externally visible results in the second half of the year."


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