EXHIBIT 99.1

EXHIBIT 99.1

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FOR IMMEDIATE RELEASE

CONTACTS:
Steve Moore Darby Dye Manfred Mueller
Chief Financial Officer Investor Relations - US Investor Relations - Europe
510 360 2300 510 360 2302 +49 89 9595 5140
smoore@scmmicro.com ddye@scmmicro.com mmueller@scmmicro.de

SCM MICROSYSTEMS REPORTS THIRD QUARTER RESULTS

FREMONT, CA - OCTOBER 29, 2003 - SCM Microsystems, Inc. (Nasdaq: SCMM, Prime
Standard: SMY), a leading provider of solutions that open the Digital World,
today announced results for the third quarter ended September 30, 2003.

Third quarter financial performance reflects continuing operations for the
Company's Security business only, as SCM sold its consumer digital media and
video business during the quarter. SCM's continuing Security business is focused
on enabling secure access to digital content and services through the digital
television and PC platforms. Financial results for the digital media and video
business are being treated as discontinued operations.

Revenues from continuing operations in the third quarter of 2003 were
$15.9 million, down 15% compared with revenues of $18.7 million in the third
quarter of 2002. By product segment, third quarter 2003 revenues included $8.1
million from sales of Digital TV security modules, $5.1 million from sales of
smart card readers and other products for PC and network security, and $2.7
million from sales of flash media reader technology. Please see attached tables
for historical and year to date segment revenues. Gross margin from continuing
operations in the third quarter of 2003 was 42%.

Operating expenses for continuing operations for SCM's Security business
in the third quarter of 2003, as reported in accordance with GAAP, were $7.4
million. This figure includes amortization of intangibles of $0.3 million and a
$0.6 million credit for restructuring costs related to the Company's continuing
Security business. Operating loss for the quarter was $(0.8) million, compared
with operating loss of $(1.8) million in the year ago quarter.

Net income from continuing operations for SCM's Security business for the
third quarter of 2003, as reported in accordance with GAAP, was $1.1 million, or
$0.07 per share, compared with net loss of $(6.3) million, or $(0.40) per share
in the third quarter of 2002. The third quarter 2003 figure included a net tax
benefit of $1.5 million arising primarily from a tax refund received in the U.S.



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Loss from discontinued operations for SCM's consumer digital media and
video business was $(10.0) million in the third quarter of 2003, and included
$(5.9) million of loss on sale of discontinued operations and $(4.1) million of
operational loss for the business in the third quarter.

Business Highlights

Business highlights of the third quarter include:

- - Strategic agreement with CANAL+ TECHNOLOGIES to sell and license the
company's MEDIAGUARD digital TV conditional access software for use with
SCM's security modules;

- - SCM's selection by CanalDigitaal, a Dutch pay-TV operator, to provide
removable security modules based on CANAL+TECHNOLOGIES' MEDIAGUARD system;

- - Demonstration, with Samsung, of the OpenCable DOCSIS(R) Set-Top Gateway,
the first consumer system to satisfy two-way communications criteria for
the Korean digital cable TV market; and

- - Qualification of SCM's OpenCable(TM) CableCard(TM) module using NDS'
VideoGuard(TM) conditional access.

Nine-Month Results

For the nine months ended September 30, 2003, revenues from continuing
operations for the Company's Security business were $53.9 million, down 19%
compared with revenues of $66.3 million for the first nine months of 2002. Net
loss from continuing operation for the nine-month period, as reported in
accordance with GAAP, was $(3.8) million, or $(0.25) per share, compared with
net loss of $(3.6) million, or $(0.23) per share for the first nine months of
2002.

"SCM continues to make progress against our strategic goals, despite a
challenging economic and market environment," said Robert Schneider, chief
executive officer of SCM Microsystems. "We have maintained a leading position
across our markets, as measured by key industry relationships and market share.
Our technology position remains strong, with new product development well
underway to address our customers' needs. And we have successfully divested our
consumer digital media and video operations, freeing us to focus on our core
Security business."

GUIDANCE

For the fourth quarter of 2003, management estimates that revenues from
its continuing Security business will be in the range of $14 million to $17
million, reflecting continued economic pressure in Europe and the U.S. and a
lack of visibility into the timing of known digital security projects in the
U.S. and Europe. Gross margin is expected to be between 39% and 42%. Within this



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range of revenue and gross margin, SCM expects to record an operating loss for
its continuing Security business in the fourth quarter.

For fiscal 2004, the Company expects first quarter revenues to increase
modestly over fourth quarter 2003 levels, and that further increases will take
place in the second quarter of 2004. Based on new projects being planned by its
digital TV and PC Security customers, SCM management believes 2004 revenues will
grow over 2003 levels.

Over the next two quarters, the Company expects to receive more than $20
million in cash proceeds from the sale of Pinnacle Systems stock and future cash
payments received in exchange for the Company's consumer digital media and video
business.

CONFERENCE CALL

SCM will hold a conference call and webcast on October 29, 2003 at 8:30 AM
Eastern Time to discuss the results of its third quarter. The webcast can be
accessed at through the Company's investor relations site at
www.scmmicro.com/ir_en/index.html.

ABOUT SCM MICROSYSTEMS

SCM Microsystems is a leading supplier of solutions that open the Digital World
by enabling people to conveniently access digital content and services. The
company markets and sells its smart card reader technology for network and
physical access and conditional access modules for secure digital TV decryption
to OEM customers in the government, financial, enterprise and broadcasting
markets worldwide. Global headquarters are in Fremont, California, with European
headquarters 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. These statements are subject to risks and
uncertainties which may cause actual results to differ materially from those
contemplated herein. These include our statements regarding (i) our expectations
for revenue, gross margins and operating loss for the fourth quarter; (ii) our
expectation that we will receive cash proceeds from sales of Pinnacle Systems'
stock during the fourth quarter; (iii) our expectations that we will be able to
grow revenues in the first and second quarters of 2004; (iv) our expectations
that projects planned by our digital TV and PC security customers will go
forward in 2004 as anticipated; (v) our expectations for revenue growth in 2004
based on these customer projects; and (vi) our belief that we will be able to
address the needs of our customers with



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new products currently under development. Actual results could differ
materially. Our financial results may not meet expectations. Our customers may
not go forward with planned projects that we believe would create demand for our
products, and these projects, if carried out, may not create demand for our
products. We may not successfully execute against our market opportunities or
the identified markets and market opportunities may grow or develop differently
than anticipated. Other risks and uncertainties that could cause SCM's actual
business and operating results to differ include, but are not limited to our
ability to manage our business given the greater volatility in sales and net
margins we experience as an OEM Security company; our ability to continue to
grow based on a strategy of participating in multiple early stage markets; our
ability to successfully develop and introduce new products that satisfy the
evolving and increasingly complex requirements of customers; the markets in
which we participate or target may not grow, converge or standardize at
anticipated rates or at all and we may not participate fully in our target
markets and competitors could take market share or create pricing pressure. For
a discussion of further risks and uncertainties related to SCM's business,
please refer to SCM's public company reports, including the Report on Form 10-Q
for the quarter ended June 30, 2003, filed with the U.S. Securities and Exchange
Commission.

###

ALL TRADE NAMES ARE TRADEMARKS OR REGISTERED TRADEMARKS OF THEIR RESPECTIVE
HOLDERS.

-- FINANCIALS FOLLOW --

NOTE: This press release includes pro forma operating results that are not in
accordance with GAAP. A reconciliation of the presentation of pro forma results
to GAAP is provided in the following tables. As described in the tables, pro
forma net earnings exclude charges related to the amortization of intangibles
and restructuring, and infrequent charges. We believe pro forma results allow
for SCM and our investors to better evaluate comparable operating results.
Further, our pro forma results are a primary indicator our management uses to
plan and forecast for future periods. These pro forma results are not intended
as a substitute for information presented in accordance with GAAP. Furthermore,
our pro forma information may not be comparable to pro forma information that
other companies provide.



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SCM MICROSYSTEMS, INC.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)