Toy company thrives in grown-up world

December 25, 2006|By Cox News Service

As he tries to decipher the mysteries of space dust collected by NASA, physicist Andrew Westphal relies on giant X-ray machines, complex computers and cheap plastic microscopes made for kids by a toy company.

The $80 microscopes and other electronic gadgets from Marietta, Ga.-based Digital Blue Corp. are expected to be hits with kids this holiday season. Westphal and fellow researchers involved in NASA's Stardust program are finding them powerful enough for grown-ups, too.

A plaything for kids becoming a important tool for professionals might be an unusual story, but for Digital Blue, it's getting to be common.

Medical researchers in Pennsylvania, computer circuit board makers in Asia and even exterminators trying to identify bugs in Australia have said they use Digital Blue microscopes, according to the company.

"They're terrific," Westphal said of the microscopes.

Another Digital Blue gadget, its $80 Tony Hawk HelmetCam, is starting to attract a similar following.

The tubular, battery-powered cameras, named after the skateboarding legend, let kids capture up to 30 minutes of video of their own stunts, play them back on computers and share them on popular Web sites like YouTube and MySpace.

But law enforcement personnel, firefighters and ski rescue teams have also bought or considered buying HelmetCams for use in their daily work, according to Digital Blue.

Recently, a London newspaper ran a story about British soldiers using Tony Hawk HelmetCams - to the dismay of their superiors - to capture combat footage in Iraq and Afghanistan that they subsequently posted on the Internet.

In Westphal's case, the Digital Blue microscopes are ideal for his lab at the University of California, Berkeley because they easily connect directly to a computer. Just as important, the plastic microscopes aren't harmed by the glass-etching hydrofluoric acid Westphal uses in his research, which would quickly destroy a more expensive scientific instrument.

Digital Blue founder and Chief Executive Officer Tim Hall said it's surprising and gratifying to see his company's products reach beyond the toy box and into professional settings.

The company's philosophy is to take electronics popular with adults and turn them into kid-sized versions for "tweens" - youths who have grown out of children's toys but who aren't yet old enough for products made for teenagers and young adults.

This year, Digital Blue introduced a Disney-branded line of digital cameras that let kids take pictures just like their parents. It also produces kid-size digital movie cameras - including an American Idol-branded version - and next year plans to introduce a line of Disney-branded MP3 players.

The market Digital Blue is focusing on is a huge one. According to surveys by the National Retail Federation and others, electronic gadgets - led by video games, cameras and digital music players - are expected to be among the top sellers for the holiday season this year.

What makes Digital Blue's products unique is that they're developed with design and quality standards that reach back to the company's roots in the high-tech industry, not the toy industry.

Hall, 41, a former Hasbro and Cartoon Network executive, started Digital Blue after buying the patents and other intellectual property of Intel Corp.'s short-lived "smart toys" division.

The division, a pet project of Intel Chairman and former CEO Craig Barrett, developed the microscopes and movie cameras to the raves of critics but couldn't sell enough of them to justify the business.

In 2002, as part of a refocusing on its core semiconductor business, Intel sold the operation to Hall's holding company, Prime Entertainment, for an undisclosed price.

After the sale, many of the people involved with the business wanted to stay with it. Kendal Miller, the former Intel executive who was in charge of the division, today is Digital Blue's vice president of product development. Other researchers and top executives hail from Dell Inc., Motorola Inc., Hayes Microcomputers and other high-tech firms.

"Most toy companies don't have those kinds of people working for them," Hall said.

In addition to about 30 workers in Marietta, Digital Blue employs another 30 people at a tech support and distribution center in Wayne, Neb. Many of them, according to Hall, have computer science degrees and were recruited from a nearby community college.

For Hall, who cut his teeth in the toy business marketing low-tech action figures like GI Joe and Batman for Kenner Toys and Hasbro, his company's success is affirmation of a trend he first spotted at Christmas 1999.

Back then, his three sons told him all they wanted for Christmas were video games and electronics, Hall said.

"They didn't want any sort of traditional toy at all," he said. "I thought to myself, `You know, this could be very important.'"

Today, his boys, now 7, 10 and 12, serve as in-house testers for their father.

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