Pinnacle Systems Acquires Dazzle Consumer Video Editing Business

Pinnacle Systems, Inc. (NASDAQ: PCLE) announced today that it hasentered into a definitive agreement to acquire the Dazzle home videoediting business from SCM Microsystems (NASDAQ: SCMM; Prime Standard:SMY), a leading provider of digital media and video solutions. Thecompanies expect to close the transaction in July 2003 and have agreedon a total purchase price of approximately $21.5 million of PinnacleSystems common stock. Pinnacle will acquire selected assets andliabilities, including all product rights, inventory, intellectualproperty, trade names, and other rights related to the business.Pinnacle will account for this transaction as a purchase during thequarter in which the transaction closes, currently anticipated to bethe first quarter of fiscal 2004 (quarter ending September 30, 2003).The transaction is expected to be slightly accretive in fiscal 2004 ona non GAAP* (pro-forma) basis. Please visit www.pinnaclesys.com for furtherdetails on Pinnacle's acquisition.

J. Kim Fennell, president and CEO at Pinnacle Systems said, "This isa great move for Pinnacle that allows us to further extend our marketshare lead in an exciting market. Combining Pinnacle's industry-leadingStudio video editing products with Dazzle's brand gives us a strongposition that lets us bring a wider variety of products to ourcustomers and be the obvious choice for home video editing."

Robert Schneider, CEO of SCM Microsystems commented, "We are happyto have found a good home for the Dazzle home video editing business.Combining Dazzle and Pinnacle's product line will benefit all customersand helps ensure continued development for new digital videosolutions."

About Dazzle Digital Video Products
Dazzle's home video editing products have been designed to capture,edit and share digital video for use with both analog and digitalcamcorders. The Dazzle family of innovative products includes thehighly successful DVC Series and Hollywood Bridge Series. Pinnacleplans to continue to sell and support the Dazzle consumer videoproducts through its worldwide network of retailers and resellers.

About Pinnacle Systems, Inc.
Pinnacle Systems provides broadcasters and consumers with cutting-edgedigital media creation, storage, and playback solutions for use athome, at work and on the air. Pinnacle Systems' award winning digitalmedia solutions are in use around the world for broadcast, cable andsatellite television, video editing, DVD and CD-R authoring, and on theInternet. A recognized industry leader, the company has received eightprestigious Emmy Awards for its technical innovations and carries thiscommitment throughout all of its product lines. Pinnacle Systems may bereached at (650) 526-1600 or at www.pinnaclesys.com.

* Pinnacle Systems will provide a reconciliation between GAAP andnon-GAAP financial results when it discloses the Company's financialperformance for the quarter in which this transaction closes.