From "Wireless Reporter" e-newsletter, Mar 26, 2001: Charmed Melds Substance and Style in Grand Fashion Show Fair by Anna Dorfman Last week, Beverly Hills-based wearable wireless technology company Charmed Technology put on its "Fashionably Unwired World Fashion Show" before crowds at the Cellular Telecommunications and Internet Association Wireless 2001 Conference (CTIA). Bringing together futuristic fashions from designer lines including Hugo Boss, Luscious, DDC Lab, Hybrid, U-Function, Private Circle and Nice Collective with gadgets that fit snugly into tie clips, brooches and sunglasses, the company presented both the possibilities of wearable technologies today and its vision of devices for the future. Among the company's four co-founders are Katrina Barillova, a former Czechoslovakian intelligence agent and model and Dr. Thad Starner, a former MIT student and researcher at MIT's Media Lab. Charmed CEO, Co-founder and Chairman Alex Lightman explained that his firm strives to be a good neighbor in the industry, and fills half of its show with products from other companies, universities and research labs. Consequently, right alongside the Charmed Badges and Communicators are innovations such as the Life Shirt, a thin, skintight Lycra-based shirt that monitors 40 of its wearers' vital signs through sensor bands. "The essence of [Charmed's] message at CTIA," Lightman said, "was to tell why this is relevant for operators. ... Europe already faces the specter of saturation with mobile phones; the idea is that while they might not need more cell phones, they will want four to five to six different devices that roll together functions into a piece of jewelry." Lightman contrasted this year's presentation with the company's "The Brave New Unwired World" show from 2000, noting that many of last year's prototypes have been replaced with actual products. He added that the earlier showcase focused heavily on university-developed gadgets and military devices for mobile connectivity, while the most recent exhibit highlighted more augmented reality technologies. Augmented reality refers to the ability to superimpose computer-generated text, graphics and video onto live camera views of the world in real-time. To demonstrate this, Lightman pointed to the company's involvement with the Disney-sponsored Duran Duran tours last year. During the band's "Hallucinating Elvis" number, for instance, a dancing Elvis would appear wherever Simon LeBon turned, while dazed fans saw the image of a 50-foot-woman jump out of a screen onto the stage for "Girls on Film." -------------------------------------------------------------------------------- The fashion show also featured prototypes of futuristic devices still in the research and development phase, such as augmented reality sunglasses, which allow users to see computer monitors in front of their eyes while also noticing everything around them. -------------------------------------------------------------------------------- Among this year's most notable products, Lightman related, was the $30,000 to $50,000 Kaiser Electro-Optics Head Up display, which he calls "a bicycle helmet on steroids." This augmented reality helmet can be used as a training tool for pilots or surgeons, as a conferencing system where the other parties' faces float inside your helmet--or, posited Lightman, imagine being able to rent such a device as a tourist. Traveling through London, wearers could see the images of buildings as they appeared during Shakespeare's time. The company also showcased a number of smartphones from Nextel and Seimens and an improved, smaller version of its own Charmed Badge. These badges contain tiny microprocessors with 16K memory and IrDA-compliant infrared receivers, and store electronic business cards and personal information. Conference attendees and vendors can use these gadgets to collect and exchange business information with other badge-wearers. An upgraded version of CharmIT's Developer's Kit was presented as well. This is a wearable, wireless broadband Internet device that can be controlled with voice, pen, or a handheld keyboard. It comes with a CPU, input mechanism, like a handheld mouse or keyboard, and a display mechanism, such as sunglasses. The device is built on the PC/104 specification and runs NANIX, Charmed's own Linux-based open source wireless broadband operating system, and Windows '98. The product has already been purchased by the U.S. Navy, Seimens and universities throughout Europe, the U.S. and Japan, with sales in India and China expected by April, noted Lightman. CharmITs cost $1,000 to make, and are sold for $2,000--generating a nice profit margin. The fashion show also featured prototypes of futuristic devices still in the research and development phase, such as augmented reality sunglasses, which allow users to see computer monitors in front of their eyes while also noticing everything around them. Power demands currently curb the glasses' practicality: "The reality right now," Lightman noted, "is that you'd need a medium-sized handbag with a computer about 1 kilogram in weight, a couple of batteries, optics to run the glasses that weigh about half a brick, and a card inside the computer for a Bluetooth connection or Ricochet modem" to make the glasses functional. He believes Charmed is one funding round plus 12 months away from reducing that baggage to one Palm-sized device to support the glasses, and about 18 to 24 months away from offering the stand-alone product. Another gadget still in the early stages of development is Internet-connected jewelry, which requires "small, lower power chips that will go 500 megahertz and a new operating system." -------------------------------------------------------------------------------- Lightman admitted he miscalculated the marketplace and put all of the company’s resources into R&D, shortchanging sales and marketing. -------------------------------------------------------------------------------- The major obstacle going forward, Lightman explained, is the harsh VC climate in today's bear market--especially for hardware-driven novelty technologies. He feels the company is one financing round away from developing the infrastructure to make Web-based jewelry possible--just as it is for augmented reality sunglasses. Charmed has so far raised $3.8 million from Yazam (which ran into its own troubles and was recently sold to U.S. Technologies) and a handful of Silicon Valley individual investors--giving the company only enough capital to focus on two basic architectures, for the badge and CharmIT. The cash shortage is also restricting the company's ability to handle large orders for its products. Lightman admitted he miscalculated the marketplace and put all of the company's resources into R&D, shortchanging sales and marketing. Now, he estimates that Charmed needs $2 million to create four profit centers, including a graphics and wireless games component. With $20 million, he predicts that his firm "could make the market happen." The situation is dire enough that the business is willing to relocate to Europe, or even Asia, if funding turns up there first. Lightman lamented, "There is tremendous interest in France, Sweden, England and in China, whereas in America, it's mass catatonia." Charmed tried wooing Hollywood, and had "a couple of cool meetings about special effects and futuristic protocols," said Lightman. But, despite a lot of initial enthusiasm, the studios did not follow through. The problem of limited demand, he believes, also depends on better, more affordable wearable technologies. He notes that the PC/104 architecture CharmITs are built on has "over 200 suppliers of components--if anyone drops their price, then we'll be able to [drop ours]." And once "we can take what's on separate cards, turn to chips, then turn to multiple chips on our own boards ... we can cut costs by half in one or two versions. Cost will drive down exponentially, and suddenly people can afford a wearable device that acts as phone, TV, medical monitoring box, distance learning system and so on." He projects that as soon as a really good and catchy product, like the stand-alone sunglasses, hits the market, supply and demand will meet. In the meantime, Lightman and his colleagues have their hands in a lot of cookie jars. Charmed recently signed a Memorandum of Understanding with the government of Karnataka, India to make the city of Bangalore the first test center for fourth generation (4G) wireless. India will provide the spectrum, licenses, alpha users and access to international broadband lines, and Charmed will offer up the technology. The company is optimistically preparing itself for the distant future with this one: 3G testing is just beginning, and the technology isn't expected to become widespread for several years. 4G technology, theoretically offering data transfer speeds of up to 54 MBps, is still many years away from becoming viable. Lightman may be juggling limited funds, but he and his organization--including a 32-person R&D facility in Poprad, Slovakia, a Beverly Hills office with six staffers, and a small 10-employee base in India--are already leapfrogging into the next generation of innovation. The trick now is to charm investors. \\\ A Rising Tide Studios production 307 West 36th Street, 10th Floor New York, NY 10018 (v) 646 473-2222 To subscribe, send a blank e-mail to subscribe-html@wirelessreporter.com For the text version, send a blank e-mail to subscribe@wirelessreporter.com To unsubscribe, reply to this newsletter with the word unsubscribe in the subject line (c) Rising Tide Studios LLC 2000 - 2001