Va. Firm's Stock Soars On News of Sony
Deal
By Sarah Schafer
Washington Post Staff Writer
Friday, May 15, 1998; Page F01
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."
c Copyright 1998 The Washington Post Company
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