Found this on the Qualcomm thread last night. AM
Integral Antenna Molds Itself To Many Uses
By CHRISTINE NUZUM
Of DOW JONES NEWSWIRES
NEW YORK -- Call it the invisible antenna.
Integral Technologies Inc. (ITKG), an outfit of eight employees in Bellingham,
Wash., has developed an antenna that can be blended with plastic, then
molded to assume virtually any form.
Made from a highly conductive material that the company declines to identify,
the antenna can be as thin as an eighth of an inch. The company said it can be
molded into functional components such as bumpers on cars, the rubber seal
that holds the windshield in place or the back panel of a cell phone.
The antenna has brought Integral, which six months ago had nominal revenue
and only one freshly-signed customer contract, to the attention of General
Electric Co. (GE) and other large multinational companies. It has hurtled the
company's internal revenue projections into hundreds of millions of dollars.
Wireless phones, vehicles that are remotely tracked and security tags in retail
clothing stores are among the candidates that Integral sees for its antenna.
Some antennas that have been on the market for several years - such as the
engraved circuit under the back panel of current Nokia phones and the car
radio antenna that is embedded in many windshields - are already virtually
"invisible." But Integral claims its antenna offers better performance and is far
cheaper to manufacture.
The antenna could be Integral's ticket to graduating from the over-the-counter
stock market. According to the company's most optimistic projections, it could
drive revenue, which was $15,209 for the fiscal year that ended in June, above
$150 million next year.
Tom Aisenbrey, Integral's general manager, developed the substance last
spring for a component of the company's low-lying "flat panel" antenna for
satellite communications. He then realized it had the conductivity to be an
antenna itself, and used it to replace the one on his own Nokia phone. It is
now virtually indistinguishable from the back panel of his phone, a plastic
casement near the top that protrudes just a fraction of an inch.
"Tom had converted one of the Nokia phones and he called me that afternoon
and said, 'Billy, it works,"' recalls Chairman and Chief Executive Bill
Robinson. "When we realized what we had, we realized we would need some
serious help."
So Aisenbrey made a cold call to GE Plastics, which lead to a manufacturing
and marketing deal. In addition to manufacturing the product, GE/Fitch, a joint
venture between GE's plastics division and Fitch Co., which is owned by
Cordiant Communications Group (U.CTC) of the U.K., will help find
customers and help with designing different models to suit those customers.
Ravi Mirchandani, regional director at GE/Fitch, says that superior reception
and a stronger signal are the antenna's top selling points.
The market for such an antenna in cell phones is "absolutely huge," he says.
"Even if they sell to 10%, that's a huge market."
Aisenbrey says that his composite, malleable substance will make today's
protruding antennas obsolete. He says it may also be combined with materials
like rubber and silicon.
"We're the only guys that are professing to do this," says Robinson, although
he added that other companies have used a similar material in shielding
equipment made to protect people from possibly harmful waves emitted from
wireless devices. Integral has a provisional patent on the substance and is
preparing to file for a permanent patent.
"There's a good deal of research going on with respect to materials that
behave like plastics but conduct like metals," says Bert Hall, a technology
historian at the University of Toronto. However, he says he did not know of
an antenna that behaves like plastic.
"I won't call it revolutionary, but I will call it useful," he says.
Getting Calls In The Dead Zone
Aisenbrey says that because of the highly conductive nature of the material,
his phone now has better reception and is usable in places where he
previously couldn't get a signal - like four floors underground in a Seattle
parking garage. Chief Financial Officer Bill Ince was able to use it during a
"dead-zone" stretch of his drive to his lakefront home. The antenna can detect
more distant signals than most existing cellular antennas, Aisenbrey explains.
GE/Fitch is starting to market the technology by pitching Aisenbrey's
modification to his Nokia phone to its original manufacturer. According to
Integral, Nokia Corp. (NOK) is interested in purchasing the antennas but is
awaiting the results of independent lab testing, scheduled for this week. Nokia
declined to comment.
Integral says it has also talked to Denso Corp. (J.DNO), which makes
handsets to be installed in cars. It, like Nokia, wants to see lab test results
before pursuing a deal. Denso declined to comment. Other potential
customers, the company says, include Motorola Corp. (MOT) and Intel Corp.
(INTC). Intel declined to comment and Motorola did not return phone calls.
Robinson says Integral is in discussions with Qualcomm Inc. (QCOM),
which may provide lab space for testing the antenna, but Qualcomm declined
to comment.
If the antenna lives up to Integral and GE's claims, it could be "a compelling
alternative to conventional technologies," says Philip Marshall, a wireless
technology analyst with the Yankee Group.
He cautions that it would have to be cost-effective to manufacture and not
susceptible to significant performance variation when mass produced.
Integral estimates profit margins of about 30% on the antennas, including fees
paid to GE/Fitch, and hopes to generate a profit immediately. Conservatively,
the company estimates net income of $2.4 million, or 8.5 cents a share, on
revenue of $20 million next year, according to Ron Manness, who serves on
the company's board of advisors. Its most optimistic projection for next year is
net income of $31.8 million, or $1.14 a share, on revenue of $183.8 million.
Over the next five years, Integral hopes to generate between $775 million and
$2.2 billion in compounded revenue, depending on the launch and acceptance
of the much-anticipated wireless technologies such as Bluetooth, which will
provide a wireless connection between various digital devices such as
computers, cell phones and some home appliances; global positioning satellite
vehicle tracking and Web-surfing cell phones.
Cell phone antennas will be priced at about 25 cents apiece, Ince says.
Integral is pinning the bulk of its expected revenue in other markets, where
lack of competition will allow it to charge higher prices.
Integral hopes to generate about half its revenue from the market for global
positioning satellite tracking of vehicles, an area where Orbcomm Ltd., a
satellite company that emerged from a bankruptcy restructuring earlier this
year, is already a customer for the company's flat panel antennas.
More expensive to make than cell phone antennas, those antennas are
expected to sell for about $90 apiece, according to Ince.
Dean Brickerd, director of technical services at Orbcomm, says he hasn't
seen anything similar to Integral's polymorphous antenna.
"It is pretty amazing," he says. "You could have an antenna that conformably
matches just about anything you could conceive of fitting it to."
Orbcomm sells services to track vehicles and large transport containers
through its constellation of low earth orbit satellites.
The company is preparing to test Integral's new antennas for tracking
containers, which are immense rectangular cartons, often hauled on the backs
of trailers, says Brickerd. When transported by ship, they are stacked on top
of one another, then side by side, leaving no room for a protruding antenna.
Integral's new antenna could lie flat on a side of a container, and perhaps
eventually, be integrated into the rubber sealant on its surface.
-Christine Nuzum, Dow Jones Newswires; 201-938-5172 |
