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Technology Stocks : XYBR - Xybernaut -- Ignore unavailable to you. Want to Upgrade?

To: Wolff who wrote (3998)	4/23/2000 3:46:00 PM
From: Scott C. Lemon	Respond to of 6847

Hello Wolff, I'm curious ... can you please provide the URLs for the parts of this post which are a Palm PR release? I have noticed that you seem to like to inject your own opinions into the posts, along with the actual text ... > PALM announced that more than 50,000 developers are > registered to create third-party solutions for the Palm > OS© platform - a significant milestone that highlights > Palm's ongoing leadership as the platform of choice in > the handheld computing market. I'm guessing again that this is simply your opinion? You didn't provide any fact or reference to anything to back up your claims ... Also, I'm still trying to understand your perspective ... you are still convinced that the "PC-companion" is going to obsolete the PC? Scott C. Lemon

To: Wolff who wrote (3998)	4/23/2000 4:30:00 PM
From: Scott C. Lemon	Respond to of 6847

Hello Wolff and All, I wanted to post this article, which might have been posted in the past, but it provides from very good information about market trends ... it's from an organization called Mobile Insights and I get their newsletter. I recommend it to anyone that is interested in this space. mobileinsights.com Mobile Insights is probably the leading analysis group on the trends in mobile and portable computing, along with mobile Internet access. It is an organization guided by Dr. Gerry Purdy, and he has the following credentials: Dr. Gerry Purdy is one of the world's leading authorities on portable devices such as WAP-enabled cellular phones, personal digital assistants, interactive pagers, notebook computers, and next generation wireless Internet devices. Formerly the Chief Analyst at Dataquest for Mobile Computing and Communications, Dr. Purdy joins Monarch from his current position as President and CEO of Mobile Insights, Inc., a Mountain View-based professional services firm. Mobile Insights serves leading mobile, wireless and Internet firms, including: 3Com, Apple, AMD, AT&T Wireless, BellSouth, Compaq, Dell, Fujitsu, Handspring, HP, IBM, Intel, Metricom, Microsoft, NEC, Nokia, Motorola, Palm Computing, Puma Technologies, Riverbed Technologies, Sharp Electronics, Sierra Wireless, Symbol Technologies, Toshiba, Wireless Knowledge and Xircom. Dr. Purdy is often quoted in such publications as The Wall Street Journal, Business Week, PC Week, The San Jose Mercury News, InfoWorld, and The New York Times as an expert in mobile and wireless products and services. Previously Dr. Purdy held marketing positions with Compaq, Fujitsu, and Phoenix Technologies. Dr. Purdy earned a Ph.D. from Stanford University. I think that we can all agree on his ability to provide some insights into the future evolutions ... and he has provided some observations in this interview: enterprisepartner.com You need to read the entire page ... the interview starts down below the dates of future events. Some of the really important points seem to be: 1. The portable is "now the primary PC for 40-plus million workers" - "70 percent of the people who are issued a new portable wind up using it as their primary PC. This is way up from a few years ago when as little as 30 percent of people did that." This is showed the transition from convention desktop usage to the laptop/mobile computing platforms of choice. 2. Technology is rapidly providing the evolution with momentum: > LBraverman: Why do you think that the portable has become > the primary PC for so many users? > > Purdy: Well, the portable has become the primary PC > because of advancement in technology that allows the > portable to provide desktop functional equivalent for the > user, i.e. most portables sold today operate at a higher > performance (CPU, memory, disk, display) than most of the > installed desktops. 3. Windows2000 (even in my personal experience) is making Windows a very powerful platform on portable computers: > ThomasD: What are the new mobile-friendly features in > Windows 2000 that VARs should look for? > > Purdy: Windows 2000 finally brings the power of NT to the > mobile world. W2K supports suspend/resume, plug and play > and power management. It makes dial-up remote access a > lot easier. It makes it a solid platform from which > applications can be developed. It's a long time coming, > but the benefits will be profound. Very profound! ;-) 4. So there will be at least four very separate segments in mobile computing ... and Intel is rapidly evolving to fully enter this space! > EdJ: Gerry, what's your outlook for portables for the > coming year? > > Purdy: Well Ed, I could talk for hours about that. So > I'll try to boil it down to one long paragraph. At Mobile > Insights, we believe that these four segments will remain > for the next few years. However, what's going to change > is the advance in technology in all of them. Intel's > coming Coppermine processor technology that uses 0.18 > micron fab process will provide higher performance at > lower levels of power. And, their Geyserville technology > will allow future portables to run at the same > performance of the desktop when plugged in and then will > "speed shift down" to a slower speed when running on > batteries. 5. Palm has some advantage today, but Microsoft is coming on strong and it will take "years" for the newer Palm to become competitive: > Walnut: What is happening with handhelds? The Palm Pilot > seems to be winning out over Windows CE, even though the > Palm doesn't do color. > > Purdy: It's not over yet. Palm seems to have > killed Windows CE. Is the race over? While it's true that > Palm Computing [a subsidiary of 3Com] has won the lion's > share of the handheld market to date selling over 1.5 > million units a year, Windows CE will become a major > player in this market in the future because Microsoft > fully realizes that it has to make the OS and core > personal information management (PIM) applications much > easier to use. Notice that the sales do not breakdown the 1.5MM into new users, vs. upgrades. Most people that I know have two or three Palms ... due to the requirement to upgrade and buy an entire device to fully utilize the latest features. ;-( > Microsoft will make the changes necessary to enable VARs > to integrate exciting applications into an easier to use > package. Right now, however, Palm is the platform > of choice. Notice that he is stating the current status ... but he leaves the door open for the future ... and it gets better. > Fidelity: What changes in ease of use will Microsoft make > to Windows CE? > > Purdy: Microsoft has shown us their next generation of > their PDA class OS and core apps [they call it the > Palm-sized category]. It is much easier to use and more > natural. The core apps are much better as well. Plus, for > a VAR that has Win 32 programming experience, this > platform will be easier to develop applications. And applications are the key to all of this! Microsoft has a very consistant development platform, and is the king of development tools. > DeeDee: Do you think that the Palm platform is not going > to succeed long-term and will lose out eventually to > Windows CE? > > Purdy: No, the Palm Platform has the opposite problem > from Windows CE. While Palm is already easier to use, it > does not address major technologies that users, > particularly VARs, will want such as color displays, > secondary storage and rich sound like MP3. While > we're under NDA with Palm, we can tell you that they are > going to address all of the technology limitations with > improvements to the platform over the next few > years. So we now see that the Palm is indeed limited, and his analysis *with full inside knowledge of Palm plans* is that it will take a few years for Palm to be competitive. Since this interview was a mid-1999 interview we are still a year or more away, unless he has updated his analysis. > So, someday you can expect to see a future Palm > device that has a color display, can use the IBM 350MB > Microdrive and will play MP3 music. So they will evolve (of course) and I was impressed to see that they intend to support the IBM Microdrive ... as I would have suspected. Wolff, any comments on the Sony memory stick? It doesn't appear that Palm is impressed ... > While they won't support Windows APIs, they will provide > support for Java and other development resources that > should enable a VAR to develop solid applications, > something that's rather limiting to do today. So unlike the biased report from the Palm press release, we find that the truth is that development for Palm is "rather limiting to do today." As I suspected, the more likely direction would be to Java, which has a larger following, but this then makes Palm a potential victim of attack by the "real" Java platform vendors. i.e. Symbian. There is also the recognition of the power of the full Windows APIs ... and the statement that this still will not get Palm to this level. 6. Java is huge, and Linux is going to have a role in the future of these platforms: > Walnut: Do you see Linux or Java emerging as OSes on > mobile devices? > > Purdy: Java plays an important role in portables as many > systems are designed to run offline. In other words, Java > is an important development language. Linux is an > important server system and may play a role in field > systems that require a mobile server, e.g. an auction or > an audit team. So, while you at first wouldn't think of > Linux, it will have a role in the future in mobile > network systems. 7. It's going to be a market with a wide range of OS platforms - hence the platform with the most flexibility will have an advantage over single OS platforms: > Walnut: Which mobile OS is better suited to VARs > developing vertical applications -- Windows CE or the > Palm Pilot OS? > > Purdy: Interesting question! Palm is the market leader > with 4-plus million units sold. They have good > development tools and just announced support for Java > with Sun. Notice again the Java direction ... this is provide wider support for applications written with much more "open" tools ... > Microsoft, however, has tremendous momentum with > corporate developers and will do very well in coming > years. Our message: plan to support both platforms as > there will not be a "Microsoft Only" world in handheld > computing. And so again, with Linux, and Windows playing here in a strong way, a flexible platform makes complete sense ... 8. Intel is not sitting by and watching ... > SMG: What about Intel's new architecture in mobile called > Geyserville. Will that be any different? > > Purdy: There is a major change coming in portables in the > year 2000. Intel will begin producing CPUs that will > operate like a desktop when plugged in and then cycle > back to a slower speed when unplugged. Thus, in the > future, new mobile systems will work just as fast as > their desktop PC when plugged in -- you'll see 700MHz > PIII in a year! 9. And what of the desktops? The evolution towards the mobile/portable continues ... > LBraverman: Gerry, do you think that desktop PCs will > completely disappear eventually? > > Purdy: It's interesting to note that all major desktop > systems today use mobile systems architecture. You can > suspend a desktop rather than turn it off -- just like > what you could only used to do with a notebook. Thus, > desktop systems have become more mobile like and mobile > systems have become more desktop like. You'll always be > able to build a desktop system cheaper than a true > portable, but they will eventually have many of the same > major components -- e.g., flat panel display, > suspend/resume and the like. This is a very good interview, and I suggest it to everyone to read ... it reinforces that we are not going to witness one solution (i.e. PC-Companion) eliminate the need for the PC. It also reinforces the evolutionary directions that the industry is taking ... More later ... Scott C. Lemon

To: Wolff who wrote (3998)	4/23/2000 6:41:00 PM
From: Wolff	Read Replies (2) \| Respond to of 6847

This article is a good example how the Hype stays the same while the losses continue to mount. Notice how the 49M dollar market of wearables in 1999, However XYBR only caputured 3.4M of it. That is about 7 percent of the total market for this self-proclaimed leader. =================== Xybernaut Forging Ahead Despite Market's Rough Terrain John Moynahan (left) and Edward Newman run Xybernaut, a Virginia company that makes wearable computers. (Leader) By Sarah Schafer Washington Post Staff Writer Monday, October 11, 1999 Xybernaut Corp. executives are pretty sure they've developed the next big thing. But for the Fairfax company, the question is, can they last long enough to convince everyone else? Xybernaut is one of the pioneers in the "wearable computer" market and has developed devices that attach to a belt and allow people to engage in hands-free computing. A Look at...Xybernaut Business: Makes wearable computers, devices that attach to user's belts and allow for hands-free, voice-activated computing. Headquarters: Fairfax Founded: 1990 Ticker Symbol: XYBR on Nasdaq President: Edward G. Newman 1998 earnings:-$13.1 million Companies in the airline and automobile industry have tested -- if not made massive purchases of -- Xybernaut's products for use by mechanics, who can use voice commands to access vast amounts of data that pop up on an eyepiece attached to a headband. But so far Xybernaut's products have not moved very far beyond the testing stage, and the company's finances are wearing thin, as is shareholder patience. Xybernaut stock is trading at about $1 a share on the Nasdaq Stock Market. The company, meanwhile, has had consistent losses because of the high cost of research and development. Last year the company had losses of about $13 million. For the six months that ended in June, the company reported losses of $9.4 million. According to Securities and Exchange Commission documents, the company's former auditor, PricewaterhouseCoopers, raised "substantial doubt" the company could continue to operate. Xybernaut fired PricewaterhouseCoopers in September. As one faithful, but frustrated, owner of several shares put it in a posting on the World Wide Web site Stock-Talk.com, "This stock is heading to zero fast. . . . Is this company ever going to stop partnering up and 'seeding' the market and actually start selling any product?" Company founder Edward Newman, however, believes his company can survive. Brian Carter, an engineering technician at Xybernaut Corp., wears a flat panel display on his forearm. (Leader) "We're not going anywhere," said the 56-year-old former CIA operative who used to help design technology that would help the "Company" identify key personality traits of world leaders. In May, Newman hired a new chief financial officer, John Moynahan, who is in the process of scrambling to raise more capital for the company, including investments from other companies and securing additional credit, although the company's poor financial performance could make the latter more expensive. As the disgruntled shareholder on Stock-Talk pointed out, Xybernaut has formed a wide array of partnerships. Last year, for example, the company announced Sony had asked it to design a wearable computer -- an announcement that caused the company's stock to spike higher than $8 a share. Last week the company announced that American Systems Corp. would provide product training and support as part of a "strategic alliance" between the companies. It is not for lack of interest or fascination that Xybernaut suffers, but rather lack of market, as one analyst put it. "It's an emerging area where you have to put in a lot of research and development into a market that is just starting to grow," said Diana Huang, an analyst with International Data Corp. in Framingham, Mass. The market for wearables is expected to top off at about $49 million this year, a small market made up of very specific customers such as airline mechanics and surgeons. By 2003, the market is expected to grow to about $630 million, according to International Data, although Huang admitted that could be a high estimate. To really take off, companies such as Xybernaut will have to cross over to the mass consumer market, which views wearables as little more than a curiosity, Huang said. Xybernaut is working on its first mass market product, one it refers to as a "PC Walk-Man" type of device. It plans to introduce the tiny computer in the fall of 2000 at the huge technology trade show, Comdex, although the device will not be ready for sale until several months later. Designed to be more powerful and lighter than Xybernaut's current product, the somewhat awkward Mobile Assistant, the product would allow users to access e-mail, surf the Web and make telephone calls. Of course, the company will have to wrest consumers' attention away from myriad other products, such as hand-held computers and cellular telephones that may not be hands-free, but offer similar applications and are already widely accepted. Newman believes other such smart devices, though, will soon move toward the wearable area, where he thinks he can fend off competitors because of several patents his company holds. One of these patents covers a computer that is worn, has a display and that a user navigates by voice. So far, a number of companies have challenged this patent, said Xybernaut chief technology officer Michael Jenkins, but have not been successful in getting it thrown out. Still, he admits that fighting off potential competitors would be costly and said the company is more likely to act early in aligning itself with potential competitors rather than waiting to fight them in court. The company does derive some revenue through licensing agreements. One such license was sold to Teltronics Inc. of Sarasota, Fla., which manufactures remote maintenance products. When it began developing wearable products, Xybernaut sued. The companies settled, but Teltronics maintains the settlement was one of convenience on its part, not an admission of patent infringement. "It was easier to settle," Teltronics president Ewen Cameron said. "It would have cost us hundreds of thousands of dollars" to fight the lawsuit. Cameron said he'll leave it to the large corporations to fight Xybernaut's patents, some of which he thinks are too broad. "It's a bit like trying to patent a laptop computer," he said. Jenkins said that while the patents will not save Xybernaut from competition in the long run, they have given the company a jump on competitors and time to learn about the potential market for wearables. Newman and Moynahan agree, although they still are a bit fuzzy on how they will pitch their concept on a wider scale. So far, "we don't know what it's going to do," said Moynahan, repeating a phrase Newman has often uttered. "But we know it's going to be big." ¸ 1999 The Washington Post Company pimall.com

To: Wolff who wrote (3998)	4/23/2000 6:57:00 PM
From: Wolff	Read Replies (4) \| Respond to of 6847

Impediments to Market Growth In addition to the technical limitations noted previously, there are other risk factors that could impede the growth and acceptance of this technology. Although the cost is dropping, there is still a high cost to benefit ratio. It is considered to be a small market niche that is below the one- percent threshold of interest in manufacturing. (Gartner Group Analyst, Linden, A., Personal Conversation, 1999, July 19) Another concern is the social acceptance of the technology. It is not yet fashionable to be seen wearing this somewhat cumbersome piece of equipment. Human factors? issues must be adequately addressed before this technology will be likely to reach wide acceptance. (Gartner Group Analyst, Fenn, J., Personal Conversation, 1999, July 27) Dominant Users The Gartner Group believes that "the early applications for wearable computing will be primarily industrial. By 2002, wearable computers will begin to appear for a more general audience, mainly focused on communications and personal information management (i.e., evolution of display phones, pagers and PDAs). Continuing research will be required to determine the appropriate applications, input/output modalities and privacy implications for these wearable systems." (Gartner Group Research Note, 1997.)