Crossbow's Year Over Year Q1 Tripling of Sales Attributed to Sharp Rise in Wireless Sensor Network Deployments; New Unit Volume Threshold Allows 35% Price Reduction.

Business Editors/High-Tech Writers

SAN JOSE, Calif.--(BUSINESS WIRE)--April 20, 2004

Crossbow Technology, Inc., (www.xbow.com) the leading full solutions supplier in the wireless sensor networking arena and the only manufacturer of smart dust wireless sensors, today announced its Wireless Sensor Networking product line's year over year Q1 sales tripled due to a sharp rise in large scale commercial deployments. The Company attributes its results to an increasing number of customer deployments of large-scale commercial applications involving as many as 1,000s of its smart dust nodes as compared to 50 to 100 node applications which dominated spending in '03. By year-end, the company expects its customers' deployments to incorporate 10,000 plus node systems.

"Crossbow has for years been at the forefront of creating and deploying smaller, smarter, wireless sensing devices and mesh networking platforms," said Mike Horton, CEO of Crossbow. "We believe momentum in sales was achieved by delivering a fully integrated solution that employs the wireless sensor industry's only open architecture platform that provides nearly 100% reliability, full product interoperability and specialized application support. These product advances have generated demand for a wave of new applications and have brought new customers into the market who need a leading edge yet technologically mature and robust solution."

Market Momentum

"Major corporations all around the world are looking down and seeing that everybody has their toes in the water, and there has been a very, very big splash in the pool. The beginning of a tidal wave of a splash, in fact," said Glen Allmendinger, president of Harbor Research, Inc. of San Francisco, CA, author's of the Pervasive Computing and Intelligent Device Networking Opportunity Report.

According to ON World, a market research firm headquartered in San Diego, California, sales of wireless sensor network nodes are projected to reach $290mm in 2004 and more than doubling from that in 2005, intelligent wireless sensor networks are already having an impact on all major sensor industries according to Charlie Chi, a senior market analyst with ON World. ON World projects that end user revenues for wireless sensor network nodes will reach $7 billion in 2010.

"Currently, they tend to be deployed in cost containment or task-related applications related to monitoring, on-off control, security, diagnoses and process failure prevention," continued Chi. "Already, their use is expanding from the 2003 base dramatically, both in terms of new applications that we see emerging in building, industrial and home automation and by the sheer scale of the networks now being deployed."

Market Adoption Rates and Pricing Dynamics

Crossbow's sales results reflect Stage 2 market dynamics as projected by On World in its February, 2004 Wireless Sensor Networking Report. In addition to growth in demand for enterprise automation due to increasing global competition, demand for wireless sensor networks is also being driven by trends such as the energy crisis, environmental concerns, increased defense, homeland security, building and general security requirements, global food supply concerns, aging infrastructure and increased consumer convenience and safety requirements.

Wireless Sensor Network Market Adoption and Unit Cost Trends(a)

       Stage 1                 Stage 2                 Stage 3
     Through 2003            2004 - 2006            2007 - 2010+
----------------------  ----------------------  ----------------------

Unit Costs (1)          Unit Costs (1)          Unit Costs (1)
$100 - $1000            $10 - $100              $1-10

Market Adoption         Market Adoption         Market Adoption
Pilots                  Ramp Up                 New Apps Emerge
Defense                 Defense                 Medical/Health
Building Automation     Building Automation     Personal Convenience
Equipment Monitoring    Equipment Monitoring    Automotive
Wireless AMR/LM         Wireless AMR/LM         Transportation
Home Automation         Home Automation         Asset Tracking, etc.

(a) Source: Wireless Sensor Networks: Mass Market Opportunities, ON
    World Q1 2004

(1) Cost of Complete Node: RF/Proc./Software/Sensor

Crossbow is far and away the dominant shareholder in this sector having been in the market at least two years ahead of its competitors. Crossbow is also the only profitable company in the smart dust enabled wireless sensor networking sector and the only manufacturer of the smart dust sensors that contribute a large portion of the functionality these networks provide. For all of these reasons, Crossbow is the first supplier to meet a projected unit volume run rate necessary to support an across the board price reduction of 35%, driving the price for low volume users below $100 per fully integrated node and for high volume users, to under $50 per fully integrated node. Not only does Crossbow support the lowest integrated node price, but it also supports the lowest development kit pricing. Developer's Kits containing Crossbow's fully integrated nodes and various tools range from $900-$2,000 vs. $5,000-$14,000 for competing solutions which provide significantly lower levels of integrated functionality.

"Crossbow's ability to drive down the cost of wireless sensor networking solutions will have an accelerating impact on market adoption," said Chi of ON World. "Crossbow's patent-pending intelligent sensor-based technologies have allowed them to offer a fully integrated application specific solution that has gained traction in the marketplace."

About Crossbow

Founded in 1995, Crossbow Technology (www.xbow.com) is the leading full solutions supplier in the wireless sensor networking arena and the only manufacturer of smart dust wireless sensors. Crossbow has for years been at the forefront of creating and deploying smaller, smarter, wireless sensing devices and mesh networking platforms for large scale defense, environmental, agricultural, industrial monitoring and control, building automation, security and asset tracking applications. Crossbow's open architecture, TinyOS-based platform, enables highly intelligent multi-sensing devices to dynamically and reliably self-organize to efficiently capture and send detailed physical data anywhere, anytime.

Crossbow is also a leading supplier of inertial sensor systems for aviation, land, and marine applications and other instrumentation sensors. The company has shipped over 500,000 of its smart dust and other advanced sensors to over 1,000 customers including select Fortune 100 and other leading industrial, defense, technology, civil engineering and manufacturing companies. Named one of the Top 50 Companies to Watch by Electronic Business Magazine in 2000, the company's strategic partners include Intel Corporation (INTL). Headquartered in San Jose, California, Crossbow has distributors in 24 countries, worldwide. The company received its ISO 9001/2000 Certification in May 2002 and its FAA Certification for AHRS500GA in January, 2003.