Fremont, CA – May 14, 2008 – SCM Microsystems, Inc. (Nasdaq: SCMM, Prime Standard: SMY), a leading provider of solutions that open the Digital World, today announced results for the first quarter ended March 31, 2008.

Revenue from continuing operations in the first quarter of 2008 was $6.5 million, down 24% from revenue of $8.5 million in the first quarter of 2007. The decrease was primarily due to a significant reduction in sales of smart card readers for U.S. government authentication programs in the first quarter of 2008, as a result of slower than expected project deployment schedules and overall weaker demand from this market. By product segment, first quarter 2008 PC Security revenue was $5.0 million, reflecting sales of smart card readers and other products for secure network and physical access, down 30% from $7.1 million in the first quarter of 2007. Digital Media Reader revenue was $1.5 million, reflecting sales of OEM digital media reader technology, up 7% from $1.4 million in the year ago quarter.

Gross margin in the first quarter of 2008 was 42%, compared with gross margin of 44% in the first quarter of 2007. The decrease in gross margin was due primarily to lower revenue levels in the first quarter of 2008 as described above.

Operating expenses in the first quarter of 2008, as determined in accordance with GAAP, were $4.7 million, an increase of 22% from operating expenses of $3.9 million in the first quarter of 2007, which included amortization of intangibles of $0.2 million. Higher operating expenses in the first quarter of 2008 primarily reflect the recent addition of sales resources in Latin America, Asia, Europe and the U.S. to increase the Company’s ability to address current and future business opportunities, as well as increased spending on new product development.

Operating loss for the first quarter of 2008, as determined in accordance with GAAP, was $(2.0) million, compared with operating loss of $(114,000) in the year ago quarter.

Earnings before interest, taxes, depreciation and amortization (EBITDA) in the first quarter of 2008 was $(1.7) million, compared with EBITDA of $40,000 in the first quarter of 2007. (See reconciliation of EBITDA to GAAP accounting contained within this press release.)

As determined in accordance with GAAP, loss from continuing operations in the first quarter of 2008 was $(1.6) million, or $(0.10) per share, compared with income from continuing operations of $134,000, or $0.01 per share, in the first quarter of 2007.

Cash and cash equivalents at March 31, 2008 were $28.7 million, compared with $32.4 million at December 31, 2007.

Guidance for 2008
For full fiscal year 2008, despite the results of the first quarter, the Company still expects to achieve revenue growth between 25% and 35% compared to fiscal 2007, which would result in total revenues of $38 million to $41 million for the year. The Company’s projections of revenue growth are based on the release of new products currently being prepared for release or under development, which are scheduled to be released beginning in the second half of 2008. The Company further expects base operating expenses of approximately $20 million in 2008, including anticipated further investments in sales resources and development activities to address growth initiatives. Within these ranges, the Company currently expects to record both operating and net profit from continuing operations for the full 2008 fiscal year.

Additional Information
SCM does not plan to hold a conference call or webcast to discuss the results of its 2008 first quarter. For more information on SCM’s first quarter results, please see the Company’s Quarterly Report on Form 10-Q for quarter ended March 31, 2008, filed with the U.S. Securities and Exchange Commission.

About SCM Microsystems
SCM Microsystems is a leading provider of solutions that open the Digital World by enabling people to conveniently access digital content and services. The company develops, markets and sells the industry’s broadest range of smart card reader technology for secure PC, network and physical access and digital media readers for transfer of digital content to OEM customers in the government, financial, enterprise, consumer electronics and photographic equipment markets worldwide. Global headquarters are in Ismaning, Germany. For additional information, visit the SCM Microsystems web site at www.scmmicro.com.

NOTE: This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These include, without limitation, our statements contained above regarding our expectations for the Company’s fiscal year 2008, including specifically our statements regarding our expectations that we will achieve annual revenue growth of 25% to 35% in fiscal 2008, based on sales of new products in the second half of 2008; that our operating expenses will be approximately $20 million for fiscal 2008 as a whole; that we will record operating and net profit for the full year 2008; and the statements by Felix Marx, including that we will become a significant supplier of Near Field Communication and other contactless reader technology for global markets. These statements are subject to risks and uncertainties which may cause actual results to differ materially from those contemplated herein. Our financial results may not meet expectations. Some of the risks and uncertainties that could cause our actual business and operating results to differ include, but are not limited to, our ability to grow revenues based on a strategy of expanding our sales into new geographic markets and on diversifying and growing our customer base; our ability to successfully develop and introduce new products, particularly contactless reader products, that satisfy the evolving and increasingly complex requirements of customers; sales to a relatively small number of customers historically have accounted for a significant percentage of our revenues; the markets in which we participate or target may not grow, converge or standardize at anticipated rates or at all, including the government and enterprise security markets that we are targeting; we may not successfully compete in the markets in which we participate or target; competitors could take market share or create pricing pressure; and our operating expenses may not be at levels that support profitability. For a discussion of further risks and uncertainties related to our business, please refer to our public company reports, including our Annual Report on Form 10-K for the year ended December 31, 2007 and subsequent reports, filed with the U.S. Securities and Exchange Commission.

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Contacts:
Stephan Rohaly
Chief Financial Officer
+49 89 9595 5101
srohaly(at)scmmicro.de

Darby Dye
Investor Relations–US
+1 510 249 4883
ddye(at)scmmicro.com