Canon and Microvision Enter into New Agreement.

Business Editors/High-Tech Writers

BOTHELL, Wash.--(BUSINESS WIRE)--Feb. 19, 2003

Microvision, Inc. (Nasdaq:MVIS), a leader in light scanning technologies, announced today that it has entered into a new agreement with Canon, Inc. that builds on work conducted during the last year to develop miniature electronic displays that can be used in consumer products including digital cameras and digital video cameras.

"With revenue in excess of $24 billion US, Canon is known throughout the world for innovation and quality in products ranging from medical and industrial imaging tools to very high volume consumer products, and they occupy a dominant position in many of the markets that they serve," said Microvision CEO Rick Rutkowski. "Canon's consummate skills in the design, packaging and high-volume manufacture of optical components and systems can be a great asset as we pursue our goal of delivering low-cost, high performance, microdisplay products to address a variety of high volume market opportunities. We are gratified to work with such a discerning and capable company."

A Canon senior executive said: "Through this agreement, Canon looks forward to further exploring Microvision's miniature display technology, which offers a range of possibilities that could contribute to the development of a new generation of innovative imaging products."

Microvision's proprietary miniature display technology projects full-motion, high-resolution images using just three Light Emitting Diodes (LEDs) to create a spot of light that is reflected off of a vibrating mirror on a micromechanical silicon chip. The tiny mirror rapidly scans a single beam of multi-colored light through a small lens to project, into the viewer's eye, a full-color video image of the apparent size and resolution of a notebook or laptop display screen. Because of the relative simplicity of the tiny silicon chip that is at the heart of Microvision's display, the company believes that its retinal scanning display technology can produce very high quality images at much lower costs than competing miniature flat panel display technologies.

According to Microvision, current prototypes of the technology produce high-resolution Super VGA (800 X 600) images with extraordinary dynamic range and unmatched color reproduction.

"We are extremely happy with the display's performance. It produces stunning images that are as good as, if not better than, a very high quality desktop monitor," offered Steve Willey, President of Microvision. "We've also made tremendous strides in miniaturization during the last year and expect in the next 6 months to meet our goal of minimum display volume consistent with requirements for commercial products. We are now focusing our efforts on developing strategies to scale to high volume production and on achieving very aggressive cost targets. We aren't ready to provide details about any product launch yet, but we have completed important feasibility and prototyping work. There are a variety of display and imaging product opportunities that Canon and Microvision could explore together."

According to respected industry observers such as IDC, Infotrends Research Group, Inc. and Cahners In-Stat Group, digital camera makers are expected to sell more than 40 million cameras annually by the year 2005.

"Annual production volumes for consumer products such as digital cameras, digital video cameras and mobile internet devices are projected to reach hundreds of millions of units annually in the next several years," added Willey. "On that basis, we believe the market for our miniature displays can reach tens of millions of units annually in that same time frame. The key challenge for this next generation of devices is that consumers are going to need small, inexpensive products, like digital cameras and mobile handsets to produce the same high quality images that we see on desktop and laptop computers today. The greatest advantage of Microvision's technology is that we believe that we can deliver superior resolution and image quality at much lower prices than competing miniature flat panel displays."

About Microvision: www.microvision.com

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 applications in a broad range of military, medical, industrial, professional and consumer information products.

Forward Looking Statement

Certain statements contained in this release, including plans to develop products, meet development timetables, future arrangements with Canon, opportunities for product sales, and product applications, as well as statements containing words like "believe," "anticipate," "estimate," "intend," "expect," and other similar expressions, are forward-looking statements that involve a number of risks and uncertainties. Factors that could cause actual results to differ materially from those projected in our forward-looking statements include the following: market acceptance of our technologies and products; our financial and technical resources relative to those of our competitors; our ability to obtain financing; our ability to keep up with rapid technological change; government regulation of our technologies; our ability to enforce our intellectual property rights and protect our proprietary technologies; the ability to obtain additional contract awards and to develop partnership opportunities; the timing of commercial product launches and ability to supply products in commercial quantities; the ability to achieve key technical milestones in key products; and other risk factors identified from time to time in our SEC reports and filings, including in our most recently filed Registration Statement on Form S-3.