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September 24, 1998

SIEMENS PARTNERSHIP MAIN HOPE FOR STRUGGLING VISION

By CBR Staff Writer

Will Siemens AG be the salvation of Vision Group Plc, the Edinburgh, Scotland-based camera on a chip company, which has been losing money at an alarming rate while it waits for the world to catch up with its technology? The lack of a high margin contract from the toy industry, which contributed over 4m pounds to revenues last year, left revenues 28% lower at 8.4m pounds while losses were up from 1.4m pounds to 5.8m pounds. Vision is talking to members of the Symbian Corporation about cameras in the planned wireless information devices and motor manufacturers are now sniffing around for a system which will show drivers what is going on behind them when they are reversing. But while the future always appears rosy, Vision continues to lose money. Siemens may change all that. Last month, Vision announced it was talking with Siemens about a deal to jointly market their sensors worldwide. The deal makes technical sense because Siemens makes complementary chips to CMOS and can offer a package to customers. Vision managing director Peter Denyer says: It’s a cautious first step to something that could be larger. A tiny 90-strong outfit like Vision needs Siemens’ huge global presence to find new customers and market opportunities. In time, they may well be a strategic investor but with the share price currently at a pitiful 25.5 pence an equity partner would be a highly dilutive way of raising new money. The current year has started well and Vision now has production wholly sourced in the Far East. The big question mark over the company is that Motorola and Intel are both pouring massive resources in developing CMOS chips. With a 40-strong development team and puny 3m pound R&D budget, Vision has to run ever faster to keep ahead. The hope now is that Siemens can open up the markets to give Vision the income it needs to keep its lead.

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