Microvision Announces Milestone in Development Of Miniature Displays for Mobile Internet Products

Breakthrough Retinal Scanning Display Uses Red, Green And Blue LEDs to Combine Color and Portability

Bothell, WA. Microvision, Inc., (Nasdaq: MVIS) the leader in retinal scanning display technology, today announced it has demonstrated a breakthrough miniature display that uses just three microminiature Light Emitting Diode (LED) lamps to create a full-color high-resolution video image. General Electric Pension Trust (GEPT) and Cree, Inc. (Nasdaq: CREE) invested $25 million in Microvision, in April of this year, to accelerate development of low-cost versions of the company s Retinal-Scanning Display technology to target a potentially huge market for wireless Internet devices. This first demonstration is a key early milestone in this effort. Microvision will immediately begin demonstrations of the micro display prototype to a select group of potential customers and partners.

The demonstration system uses unique "edge-emitting LEDs," made for Microvision under the first phase of a multiyear development agreement with Cree. The tiny, low-power diode lamps are affixed to three sides of a miniature optical cube, modulated at very high speeds, and scanned by miniature vibrating mirrors, through a compact lens, into the viewer s eye. The viewer has the impression of seeing a full-size computer or television screen at arm s length from the very compact package.

The company believes that the low-cost light sources, together with their proprietary microscanning technology can enable compact display solutions for a variety of high-volume consumer products such as handheld and wearable Internet viewers, viewfinders for digital cameras and camcorders, and wearable displays for computer games and portable computers.

The initial focus of the recent demonstration was to ensure that blue and green LED s recently developed by Cree were sufficiently bright to create a quality image on the eye.

According to Rick Rutkowski, Microvision s President and CEO, "This first demonstration has exceeded our best expectations. The displayed video image is absolutely beautiful; bright, vivid, and rock-solid! Our engineers were also delighted at how easily the system went together. With the LEDs, alignment tolerances were very forgiving, which should give us a leg up in high volume manufacturing. We have a well-funded program going forward, that will provide us with exclusive access (for scanning displays) to ongoing improvements made by Cree in the brightness and efficiency of these LEDs. We are also making excellent progress on additional technical milestones such as combining the LED module with our proprietary microminiature (MEMs)scanners made from silicon. Following that, we intend to produce product concept designs featuring the LED-based microdisplay for user testing and on-going demonstrations."

"We ve been viewing DVD full motion video, and a variety of static images through the display", stated Steve Willey, Microvision Executive Vice President. "We are really pleased, because the imagery of our display exhibits none of the field-sequential color break-up or defective pixel effects that haunt miniature display panels made from Liquid Crystal and Liquid Crystal on Silicon. The pixels in a retinal scanning display are non-rectangular, which contributes to a noticeable improvement in images containing curved or angular lines. We re also seeing a complete lack of motion blur, and a unique sort of freshness or three-dimensional quality, that is not evident on other displays. We believe that this is the result of the instantaneous exposure of the retina to color pixels that have absolutely none of the persistent afterglow, or tail artifacts, that cause pixels on Cathode Ray Tubes (CRTs) or flat panel displays (FPDs) to smear moving images. We think our customers and ultimately consumers will react very well to the improved image quality and reliability."

By 2004, more end-users will access the Internet via handheld mobile terminals than wireline connections, according to the ARC Group, a leading provider of wireless market data. Of the projected 1 billion Internet subscribers, 750 million will use mobile terminals.

One of the concerns most frequently cited by industry analysts is the small size of the display screens for these portable products. Microvision s retinal scanning display will solve this problem by creating the effect of viewing a full-sized high-resolution computer monitor. The mobile terminals envisioned by Microvision can be configured as handheld devices that will scan the beam through a small lens to be positioned around 3 to 4 inches from the eye, or as a lightweight display that could be worn like eyeglasses and connected to a wireless device.

About Microvision

Headquartered in Bothell, Wash., Microvision, Inc. is the developer of the patented Retinal Scanning Display technology and a world leader in micro miniature optical scanning technology for display and imaging applications. The company s technology has application in a broad range of military, medical, industrial, professional and consumer information products. Additional information can be found at the company s Web site at http://www.mvis.com.

Forward-Looking Statement

The information set forth in this release includes "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created by those sections. Certain factors that realistically could cause results to differ materially from those projected in the company s forward-looking statements are set forth in the company s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the Securities and Exchange Commission.

Contact:
Microvision, Inc., Tel: 425-415-6847
Matt Nichols (Media),
mattn@mvis.com
or
Holly Ash, (investors)
hollya@mvis.com