Start ups hope to cash in on wireless communication


January 27, 1992|By Tom Steinert-Threlkeld | Tom Steinert-Threlkeld,Dallas Morning News

Dallas -- Wireless communication is sizing up to be a fountain of heady growth.

Wireless phones, computer networks, paging, data transmission and other services are expected to create a $38.3 billion market in 1995, up from $11.1 billion in 1989, according to Gartner Group in Stamford, Conn.

Money -- lots of it -- is flowing into wireless start-ups.

Even though it has yet to report an annual profit, Dallas-based Spectrum Information Technologies Inc. raised $10.7 million from the public last year for a business focused on computer attachments that allow data to be transmitted through cellular telephones.

Late in December, privately held PageMart Inc., of Dallas, raised $24.5 million in venture capital for its foray into paging services delivered off satellites.

Here's a look at two aspiring wireless wonders.

Roger Linquist, of PacTel Personal Communications, holds a paging device that looks like a Hewlett-Packard Co. palm-top computer.

It is a Hewlett-Packard palm-top computer.

In the PageMart president's vision of the future of paging, portable organizers and small computers will become pagers. Their larger screens will allow paging to send users long messages.

This will add "another dimension of communication" to a business that has been regarded as a poor sister to cellular telephone service, he said.

Meanwhile, Mr. Linquist and a coterie of compatriots from PacTel are setting up nationwide and regional paging networks that will be fed by transmissions that bounce off satellites.

The use of satellites allows any local transmitter to receive the same signal and spread it through a given area. The overlap increases reliability. Combined with PageMart's use of a high radio frequency, messages on its system are designed to reach pagers even in hard-to-reach places.

But technology is not the whole thrust behind PageMart's entry into wireless communication. The firm also intends to restructure the way pagers get into the hands of customers. Where competitors typically rent pagers, PageMart will sell them.

So customers will pay for services not rent on their pagers.

Those services will expand if Mr. Linquist is right about the future. Now, he expects to sell attachments to palm-top computers that add the ability to communicate by the right radio frequencies for paging. Later, he hopes such features will be built into the coat-pocket machines.

One result could be that a manager on the move flips open his pocket machine and telephone messages appear on screen that look like the familiar office forms.

Until the mid 1991, Spectrum Information Technologies had not registered a profitable quarter since its inception in 1984.

"We were way too early for the market," said President Dana C. Verrill.

In the first six months of this fiscal year, Spectrum has converted last year's $733,000 loss on sales of $9.2 million to net income of $178,000 on sales of $14.0 million.

Along the way, the company has raised enough money from the public to retire its long-term debt, increase its cash reserves and expand lines of credit. It has pared its corporate structure, eliminating subsidiaries and redundant managers.

Yet the company's long-term success will be based on the acceptance of a small device that connects portable computers and cellular phones.

The device is called Axsys. It's pronounced "axis," but means "access" to the wireless, cellular radio network.

It is not a modem, an accessory normally installed inside computers that translates digits into the analog waves that are transmitted on phone networks and does the reverse for incoming information.

Instead, this is a device that fits between a portable computer equipped with a standard modem and a cellular phone.

It allows a convenient halfway point for connecting computers to the wide variety of cellular phones on the market, which have different plugs and technical requirements for connecting to accessories. A standard phone cord connects a modem-equipped portable computer to Axsys. Then, a cable designed for a particular cellular phone makes the connection between Axsys and the phone.

The device provides capabilities that allow data to be transmitted in the harsh world of wireless communication.

The Axsys devices and related circuitry in a modem help smooth "hand-offs" of wireless transmissions from one radio cell to another, as the sender moves by foot, car, plane or other means. Special protocols also alter the size of the data packets to as few as 10 characters, to maintain connections even in the face of noise and interference. Then, the Axsys device tunes signals that are transmitted and received from the phone to make "clean" communications.

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