RE: NEC!!! Yesterday's Sandiego Union Tribune Article
Inventor strives for the sound of success | Audio technology designer tries new business strategy
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Bruce V. Bigelow
STAFF WRITER
06-May-1998 Wednesday
Woody Norris | American Technology Corp.
If nothing else, Woody Norris gets credit for persistence.
After struggling without success at two San Diego-area companies, the
prolific inventor hopes to avoid his past mistakes as he rolls out a new audio technology for the consumer electronics industry.
In the early 1990s, Norris built a company around the promise of a digital voice recorder he invented. He gushed that his "Flashback" device would replace the hand-held tape recorder. But earnings failed to materialize.
Stock in Poway-based Norris Communications, which traded as high as $4.50 a share in 1994, is now worth about 10 cents a share.
In 1995, Norris shifted his energies to Patriot Scientific Corp. following the unexpected death of Patriot's chairman and chief executive. Norris had founded Patriot in 1987 to develop some of his other inventions, including a ground-penetrating radar.
Patriot's stock, which had been trading at 18 cents a share, suddenly
rocketed to $4.03 in early 1996, fueled by enthusiastic reports about an innovative computer chip the company had acquired in its 1994 merger with Oregon-based NanoTronics.
But market acceptance of the chip was slow. Shares in the San Diego company now are trading just below $1 a share.
The results have been discouraging, but Elwood G. "Woody" Norris is an
eternal optimist. Nowadays, the 59-year-old inventor is working at yet
another company he founded, American Technology Corp., to commercialize yet another gadget he devised.
Norris' latest innovation, known as HyperSonic Sound, uses ultrasound to produce audible stereophonic sounds out of thin air. If it is successful, he believes the technology could replace the common loudspeaker in everything from concert halls to hearing aids.
That is a big "if."
American Technology Corp. could be strike three for Norris, but many
supporters believe the third try is a charm for someone with a demonstrated flair for electronics and acoustics.
Norris was working as a technician at the University of Washington in the early 1960s when he invented his first acoustical gadget, a "transcutaneous Doppler" that used sound to identify differences in tissue beneath the skin.
"You could slide it up and down your arm and hear the blood going 'shoosh, shoosh, shoosh,' " Norris recalled.
He obtained a patent for the device, which a medical company purchased in a deal worth more than $330,000.
Ideas underlying Norris' transcutaneous Doppler were incorporated in the development of ultrasound equipment used for medical imaging and diagnosis.
Norris subsequently sold a couple of other inventions, including an
electronic circuit that is now a common feature in recording studio mixing boards and an unusual linear tone arm designed for stereo turntables.
"The guy is definitely ingenious," said Andy Sturman, a San Diego
electronics engineering consultant who was hired to help Norris develop American Technology's "HyperSonic Sound" technology.
"My gut feeling is that Woody's going to hit on something really big one of these days," said Sturman, who is no longer involved with the company. "The guy's got lots and lots of patents and he's a creative guy."
Norris plans to combine his HyperSonic Sound technology with a related
flat-panel speaker less than four-tenths of an inch deep to create a new "surround sound" standard for audiophiles.
Still, "There's a big difference between having a good technology and
having business success," said Chet White, an analyst at the Los Angeles office of L.H. Friend, Weinress, Frankson & Presson Inc.
White recently rated American Technology as a "strong buy," although the company never has showed a profit and posted sales of just $967,000 in 1997.
The company, which has about 11 million shares trading in the
over-the-counter market, has rocketed beyond $11 a share in recent weeks.
The stock began climbing sharply last month, after American Technology
announced an agreement with Philips Consumer Electronics, a unit of the $39.3 billion Dutch electronics corporation. The deal allows Philips to evaluate American Technology's HyperSonic Sound technology for possible use in its audio products.
American Technology also has been negotiating an endorsement deal with Ray Charles, the soul singer, and has worked out a development agreement with the research arm of Japan's NEC, the consumer electronics manufacturer.
The company's proprietary technology won an award for technical innovation from Discover Magazine last year and was selected as "Best of What's New in 1997" by the readers of Popular Science.
"One thing you can say on the positive side for Woody is that he's an
inventive genius," said White, the financial analyst. "On the negative, and he will admit this himself, he is just not a good businessman."
Norris insists he has not given up on any of the companies he has been
involved with, and maintains that building a successful business requires years of attention.
"The biggest lesson I've learned, because I dislike it and I don't do it real well, is management," Norris concedes. "I'm an inventor and I think I do real well in that area."
Robert Putnam, who has worked with Norris for the last 14 years, says
"Woody's never been one to grab on to the reins and try to run things."
On the other hand, Putnam said, "When you're just two guys working out of a garage, who else are you going to get?"
So Norris, who owns about 28 percent of American Technology, now serves as a director and the company's chief technology officer. Norris also has relinquished much of his management responsibilities at Patriot Scientific and Norris Communications.
Dale W. Williams, a consultant who was advising American Technology on
strategic planning and business development, was named last September as the company's chairman and chief executive.
In addition, the company hired Jim Croft, a longtime engineer at a high-end stereo company, to oversee engineering development. Richard H. Wagner, a former contract specialist at Rockwell International, was hired to handle contract management and licensing.
"We've established a new philosophy," Williams said. "We looked at where these new technologies impact the market, and we've tried to develop an alliance strategy with several large consumer electronics corporations."
If everything works according to plan, the potential market is enormous.
"There are billions of speakers made every year for everything from
high-end television systems to toys," Williams said. "And we're seeing
incredible acceptance in the market."
There are billions of speakers made every year for everything from
high-end television systems to toys," Williams said. "And we're seeing
incredible acceptance in the market."
QUICK AUDIT
Company: American Technology Corp.
Business: Acoustical technologies for consumer electronics
Founder: Elwood G. Norris
Headquarters: San Diego
Employees: 17 employees and 5 outside consultants
Revenues: $967,000 in 1997, mostly from sales of small radios |
