Va. Firm's Stock Soars On News of Sony DealFriday, May 15, 1998; Page F01
By Sarah Schafer
Washington Post Staff Writer
A Wall Street buying frenzy struck another small local company, Xybernaut
Corp., sending its stock surging 180 percent yesterday. The apparent cause:
confirmation from Sony Corp. that it would build a "wearable computer"
designed by Xybernaut.
Sony official Yasuo Ono described the production plans in an address
Wednesday to a Fairfax conference on wearable computers, devices that
people attach to their bodies to keep their hands free in such jobs as aircraft
maintenance and surgery.
The news was not new; Xybernaut had announced it last September, causing its
stock to double briefly to a bit over $5. Yesterday the stock closed at $8.43
3/4, up $5.46 7/8. Noted Xybernaut vice chairman Steve Newman, "Maybe
Mr. Ono's words were more believed than ours."
Yesterday's climb followed by 10 days a dramatic run-up of the stock of
another local start-up company, EntreMed Inc., whose stock soared after the
New York Times published a glowing report on efforts to develop cancer
treatments.
Xybernaut is one of a number of companies pursuing the wearable dream.
Investors have been fickle about it -- shortly after the company went public in
1996, its stock was trading at $16. The company, which last year lost $9.48
million on revenue of $813,000, has 55 employees at its headquarters in
Fairfax. It also has offices in Japan and Germany.
Wearable computers have long been relegated to university labs but are slowly
migrating into the marketplace. According to Martin Mortensen of Gartner
Group, "wearable computing will remain a curiosity until around 2000." But,
he continues, "by 2006 it will go into mainstream technology."
But what drives many visionaries in the field is the hope that eventually these
types of computers will be as commonplace as, say, the Sony Walkman.
In fact, Xybernaut's executive vice president of Asian operations, Kaz
Toyosato, worked on the original team at Sony that developed the Walkman,
he said. He also helped develop the 8mm camcorder.
He calls both of these things precursors to wearable computers. "Most people
believe the notebook [computer] is the end, "but our goal is this size," he said
during the conference, patting his blue leather wallet. He calls it "a second
brain."
At the 1998 International Conference on Wearable Computing, held at the
Hyatt Fair Lakes in Fairfax this week under Xybernaut's sponsorship, 24
companies exhibited their variations of wearable computing.
Xybernaut's new product, called the Mobile Assistant IV, lets the user control
it with voice commands. It includes a headset and, carried on the belt, a
compact computer on the belt with a Pentium 233 MMX processor.
Many initial uses relate to maintenance and the military. In Germany, auto
maker Daimler-Benz is testing Xybernaut's product at one of its plants.
Technicians checking welds use it to analyze and communicate about problems
that they find.
The Boeing Co. in Seattle is testing another firm's wearable with some of its
airline mechanics, says Chris Esposito of the wearable computer group at
Boeing. The mechanics use the portable units to view diagrams so they don't
have to leaf through manuals while working on airplanes.
Wearables come in many other forms. Albacomp Computers Corp., a
Hungarian firm that exhibited at the conference, designs eyeglasses that have
tiny video monitors in the center.
Hooked to a video camera, the glasses allow the wearer to observe the video
and still have a clear view to, say, work, take notes, or carry on a
conversation. "They're very socially acceptable," says a member of the
Albacomp team.
As of now, Albacomp's only customers are surgeons. While performing
operations they can use the glasses to view video images from cameras placed
inside the patient's body rather than having to turn to look at conventional
video monitors.
Point Research Corporation in Santa Ana, Calif., secured funding from the
Army to develop the Dead Reckoning Module, another product on display.
The coaster-sized hardware is designed to fit into soldiers' gear and track their
whereabouts. The Army has agreed to purchase 1,600 to 6,000 of the devices
by the year 1999, according to the company.
Most consumer applications for wearable computers -- they'd be a more
powerful version of today's electronic organizers -- are probably a long way
off, says Gartner's Martensen. "It's expensive," he says. Besides, he adds, these
gadgets are competing with the already mainstream personal digital assistants
such as U.S. Robotics' Palm Pilot, which sold between 1.4 and 1.6 million
units last year in the United States alone.
Steve Newman says he has faith that consumer acceptance will come and says
the news of the buying binge is "good for the stockholders who've had faith in
us."
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