Vision Group Plc, the Edinburgh, Scotland-based CMOS camera on a chip company, has reported net losses for the year to July 31 of ú1.5m down from losses last time of 2.3m pounds on revenue that rose 165% to 11.7m pounds. Vision Group has begun to unravel some of the market potential for its camera on a chip but the board is cautioning investors that while it still leads the world in its technology sector, the earnings pattern from its emerging markets will be far from smooth. Revenues for the year to July 31 have taken a quantum leap again, growing 165% to 11.7m pounds, while net losses have fallen from 2.3m pounds last year to just 1.5m pounds. Vision Group continues to refine its CMOS imaging technology, the advantage of which is lower power consumption and reduced cost from combining all of a basic camera’s components (bar the lens) on a single chip. Current picture quality is still grainy from the top end 800,000 pixel array, but the latest chip, with an array containing 1.3 million pixels, will be shipping by mid 1998. This will facilitate the first CMOS based digital cameras capable of approaching the quality of conventional photographs and is a significant milestone for the digital stills camera market, although Vision Group does not manufacture a finished stills camera itself, preferring to sell its chips to OEM clients like Vivitar. In the desk top videoconferencing market, Vision claims that its current product offerings are close to matching the picture quality of rival CCD cameras and will soon exceed them, but at a better price. Once the magic $99 price tag is reached, Vision expects PC manufacturers to start bundling the cameras as part of a package. The company claims a 25% market share worldwide for its monitor mounted cameras which it builds itself but badges under other names, like Creative Labs, who market the product. Half of Vision’s turnover comes from selling these units while the other half comes from chip sales, and 80% of all revenues originate from US companies. The gross profit margin has risen from 16% to 23% and finance director Colin Grant expects margins to climb above 30% long term. Moving the assembly of its videoconferencing cameras to China for example, has cut costs by 80%. But price erosion for the finished product is expected to be severe, in the 20-30% per annum range. Vision aims to update its chips with a new generation every year and is claiming that its competitors (including Toshiba Corp) are still at least one generation behind. The shares remained unchanged at 111 pence.
