Pulse Hopes to Plug Into Portable Computer Surge
Despite the recession, some high-ticket items continue to sell.
Light and portable laptop computers, for example, are selling like hot cakes, despite price tags of $2,000 and up. Smaller “notebook” computers made by IBM, Apple, Compaq and other manufacturers that are no larger than a student’s loose-leaf binder are one of the fastest growing market segments in high technology, even at prices of $4,000 per unit and up.
San Diego-based Pulse Engineering is hoping to ride the wave of consumer fascination with the lightweight computers, a wave that is expected to crest even higher over the next few years as prices for the computers decline, making them affordable to a broader market.
One of the reasons that the market for the battery-operated computers is expected to expand is that the industry’s 250 manufacturers have finally worked out an agreement that sets manufacturing standards that all agree to abide by. The net effect of the standards is that laptop and notebook computer owners will find it easier and cheaper to buy peripheral equipment such as modems and data-storage devices.
Until the standards were set about a year ago, owners of an IBM or Toshiba computer, for example, were forced to buy peripherals made by the same manufacturer. With the universal standards in place, various brand name products will be interchangeable.
Pulse makes electronics components that are critical to the new interchangeability, devices called interface modules that enable individual portable and notebook computers to exchange data in local area networks.
Pulse sells its units to large computer equipment manufacturers including IBM and National Semiconductor that integrate the Pulse pieces into products sold under their own trademarks. Pulse hopes to ring up sales of interface modules of between $5 million and $7 million in 1993 alone, if laptop and notebook computer sales grow according to projections.
That sort of explosive growth in a new product line would be a welcome boost for Pulse, which saw sales and profits fall, respectively, to $62.2 million and $5 million for fiscal 1992 ended June 30, from sales and profits of $64 million and $7.6 million in fiscal 1991.
The company is counting on big things from the interface module, having spent a year and a half and millions of dollars in research and development.
Pulse Engineering has 3,000 employees, but only 170 in San Diego, its corporate headquarters. Most of its workers are posted at offshore plants in Mexico, China and Ireland.
But no matter how well Pulse Engineering does, industry analysts expect rapid expansion in the laptop and notebook market that the company is attacking.
Janet E. Cole, an industry analyst with Dataquest, a San Jose-based market research firm, said the market for notebook computers alone will grow at a compounded annual rate of 53%, reaching 4.8 million unit sales per year by 1996.
That high growth expectation, Cole said, is due to the portable computers’ rapidly shrinking “form factor,” which is high-tech jargon for computer designers’ goal of putting more computer power in smaller packages.
“People really appreciate the portability,” Cole said. “A lot of people do want to be able to travel with their computers, to just throw them in a brief case.”
