EYE IN THE SKY : Technology: Military satellite navigation system poised for commercial boom. California could win big.


The Pentagon is awash in obsolete nuclear bombs, mothballed battleships and surplus military bases, but out of the scrap heaps left by the Cold War has come a technology with a promising payoff.

When the Defense Department laid plans in the 1970s for its Global Positioning System, a network of 24 satellites that broadcasts navigation signals to users on Earth, it was intended to help soldiers fight anywhere, from jungles to deserts.

For the record:
12:00 AM, May. 04, 1994 For the Record
Los Angeles Times Wednesday May 4, 1994 Home Edition Business Part D Page 2 Column 6 Financial Desk 1 inches; 34 words Type of Material: Correction
Trimble navigation--The company expects sales growth of 20% in 1994. A story in Sunday’s Business section that quoted company estimates of a growth rate of 50% to 60% referred to the overall market for satellite-based navigation systems.

Along the way, though, commercial interests saw a potentially lucrative concept that could revolutionize industries such as land surveying, trucking, environmental protection and farming.

The technology, now poised to leap into virtually every facet of the American economy, is expected to create a $5-billion to $10-billion industry by the end of this decade and more than 100,000 jobs.


With a special receiver that taps the satellite signals, civilian users can determine their position by latitude and longitude within 100 meters (328 feet) anywhere in the world. Once as big as a file cabinet, the receivers are now the size of a paperback book and still shrinking. Consumer models, used by wilderness backpackers, cost as little as $500.

Some visionaries anticipate the day when virtually everything that moves in U.S. society--every shipping container, aircraft, car, truck, train, bus, farm tractor and bulldozer--will contain a microchip that will track and, in many cases, report its location. Massive computer systems, they say, will tie together the movement of assets in the economy, providing a sophisticated information system for the status and location of goods.

California has quietly come to dominate the new field, much as it did the personal computer industry in the early 1980s. A third of the world’s GPS equipment manufacturers, including the dominant firms in the industry, are in California, according to recent industry surveys.

Assuming California can hold its position, it stands to gain a major share of the new jobs. And while the state is desperate for growth, the benefits of the GPS industry have gone largely unheralded, in part because the defense industry bust has overshadowed GPS.


Such new firms as Magellan Systems in San Dimas, Trimble Navigation and Ashtech in Sunnyvale and ESRI in Redlands dominate the commercial business and are growing at 20% to 40% annually. Meanwhile, the California operations of Rockwell International and Magnavox are top players in the defense market.

The federal government set the stage for this commercial growth merely by guaranteeing civilian access. In one of his lesser-known but farsighted decisions, President Ronald Reagan decreed in 1983 that the system would be free to the public, rejecting bureaucratic calls for a cumbersome toll system.

The navigation system is among a handful of advanced military technologies--ranging from spy satellites to plastic composite materials--that hold out potential for commercial development. Yet, whereas defense conversion in general remains uncertain, GPS is clearly the best example of military technology moving from the battlefield to the marketplace.

“Communications satellites were the first great success in space, but GPS is going to dwarf that,” said Albert Wheelon, a former Hughes Aircraft chairman and an early pioneer in commercial space. “GPS is going to pervade everything we do.”


The satellite navigation system was expected to have civilian applications, but the market has turned upward dramatically in the last twoyears as costs have declined, according to Stephen Colwell, president of a consulting firm in Sunnyvale.

By later this year, a satellite receiver may be boiled down to just three computer chips costing about $100 per set; eventually, the price will drop below $50, Colwell said. At that point, GPS would be inserted into a lot of other electronic gear, such as cellular telephones that could instantly alert police to an individual’s location in an emergency.

“There are a million deals going on,” Colwell said. “It is seldom you see a new technology coming on so rapidly.”

Indeed, use of the system is expanding quickly.


Computerized maps are being used to track the spread of disease, pollution and crime, based on data collected from GPS systems. Hamburger chains pore over these kinds of computer-generated maps to determine the best sites for new franchises.

Interstate truckers use the system to keep tabs of their road taxes. Commercial fishermen use the system to return to fertile fishing holes. It has led to important advances in the study of earthquakes, allowing geologists to measure in inches how far temblors move land masses. Cities use the satellite system to dispatch emergency vehicles and track the location of passenger buses. Railroads are finally able to figure out where their trains are.

“Every month, every week, there is somebody who comes up with a unique new way to use this,” said Jules McNeff, the Pentagon’s key technical and policy expert on GPS. “Its uses will be limited only by people’s imagination.”

Orbiting 11,000 miles above Earth, the 24 satellites are the heart of the system. They constantly broadcast signals that allow a ground receiver to calculate its distance from each satellite, based on the precise time it takes the signal to travel from space to Earth. Each satellite carries four atomic clocks--so accurate that they lose only one second every 160,000 years.


By capturing signals from at least three satellites, a receiver’s software can determine which point on Earth is the exact distance from the satellites.

The military reserves for itself encrypted signals that provide an accuracy of 10 meters, within about 30 feet. Commercial users get a signal with random errors purposely created to reduce the accuracy to 100 meters--a technique intended to deny foreign adversaries use of the system for precision guidance. But 100-meter accuracy is just fine for many civil applications.

The navigation system, for example, is coming to the rescue of motorists who get lost.

General Motors was the first Big Three auto maker to introduce a vehicle navigation system, which includes a computer-generated voice that tells drivers the route to any destination in the United States. Compact discs will contain maps of every U.S. city, displayed on a dashboard screen.


“A good proportion of our society can’t read maps at all, so they have to find their way by landmarks and verbal instructions,” said Bill Spreitzer, GM’s technical director for intelligent vehicle systems. “Studies have shown that 20% of the time, people drive further than they need to.”

Magellan Systems signed a deal last year to supply three Japanese auto makers with the electronic guts for a navigation system. The contract is expected to double the firm’s size in the next few years and create 750 new jobs.

Magellan has moved to successively larger facilities in Southern California three times in the four years since it began producing commercial receivers. Sales of the privately held firm this year are expected to top $30 million.

“Automobile navigation alone will dwarf the military market in size,” said Magellan President Randy Hoffman. “The commercial uses of GPS will far outstrip the military uses.”


Industry will also tap the system to enhance productivity.

Experts see the day, for example, when a computerized design for a highway could be directly fed into earth-moving machinery controlled by the navigation system. A receiver on the blade of a plow could be used to precisely grade the roadbed.

“There are a lot of inefficiencies in society, and a lot of them can be resolved by answering the question, ‘Where is it?’ ” said Charlie Trimble, president of Trimble Navigation.

Utility crews, for example, climb up the wrong power pole 10% of the time, a mistake that will be eliminated as poles are indexed by GPS location, Trimble said. Recently, his firm introduced floating navigation receivers that can be dropped on petroleum spills to precisely track the spread of oil contamination.


Trimble Navigation led the GPS market in 1993 with sales of $150 million, specializing in highly accurate electronic systems used by land surveyors--devices that have replaced Japanese, German and Swiss optical survey instruments, Trimble said. The firm expects sales growth of 50% to 60% annually.

Meanwhile, software for computerized maps that use GPS data is becoming a huge market. Software created by ESRI, for example, is used by oil firms to create detailed geologic maps for exploration and by railroads for monitoring track conditions.

With 1993 sales of $120 million, ESRI holds 70% of the world market for such software, known as geographic information systems. The firm’s computerized maps were widely used to track the incidence of aftershocks following the Northridge earthquake.

“From the start, we saw that geographic information could link together many different functions in our society,” said Jack Dangermond, ESRI’s president and sole owner. “We are just beginning to understand how we can use this.”


Indeed, airlines can use the system to fly more direct routes and save fuel. United Airlines recently estimated that it will save more than $500 million annually by relying on satellite navigation in the future.

In February, the Federal Aviation Administration began allowing airlines to use GPS to navigate, but the agency will require aircraft to have a backup navigation system until 1996, said Dick Arnold, the FAA’s director for navigation systems.

Navigation has been a crucial military technology for centuries, making possible the spread of early empires, European settlement of the Western Hemisphere and sophisticated warfare in the 20th Century. GPS is the ultimate extension of that concept.

McNeff, the Pentagon expert, said the system will eventually be inserted into every type of weapon--jet fighters, missiles, tanks, ships and precision ordnance.


Until the 1991 Persian Gulf War, many military officers did not trust the untestedtechnology, but the system was crucial to the U.S. Army’s success in outflanking Iraqi forces in the barren desert.

“It gave them the ability to operate in bad weather, at night, coordinate movements and deliver weapons through smoke and haze,” McNeff said. “Commanders couldn’t get their hands on them fast enough.”

Indeed, Magellan shipped 3,000 of its commercial receivers to U.S. and coalition forces that were short of the military versions.

Rockwell leads the military market. The firm--with electronics plants in Newbury Park and Newport Beach, Texas and Iowa--plans to build 50,000 receivers this year and expects sales to grow 25% annually.


Explosive future growth in GPS applications will result largely from clever efforts to enhance the system’s basic capability. Commercial users have discovered that they can vastly improve accuracy by using ground stations as additional reference points to the satellite signal, yielding accuracy of one meter and, potentially, a few millimeters.

Differential Corrections in Cupertino, Calif., is installing ground stations for the more accurate systems in 70 U.S. cities and has begun shipments of special receivers that customers will need, according to owner Ronald Haley, a former Trimble executive.

The higher accuracy application--known as differential GPS--will allow airlines to use the system to perform precision landing approaches in poor visibility. The FAA has authorized initial tests of such a system.

Helping keep track of people is also clearly in the system’s future. Authorities could follow parolees around with GPS, though one limitation is that the system does not work inside buildings or underground.


“You may someday want to hang one around your kid’s neck before he goes off to school,” said Lanny Ross, president of Rockwell International’s telecommunications group, a major producer of the systems for both military and commercial markets.

Although GPS technology used to track individuals may someday raise concerns about personal privacy, the issue will be something for future generations to ponder, experts say.

“I think somewhere beyond the year 2050, this will be embedded in you and your location will be known at all times,” Ross suggested. “I can imagine a set of social conditions where I would want people to know where I am at all times--if I lived in Colombia or Somalia.”

Where 911 Meets 2001


Global Positioning System satellites circling 11,000 miles above the Earth (1) broadcast signals to an ambulance, allowing the driver to determine his or her location (2). The locations of all ambulances in the system are constantly being transmitted to a dispatch center (3). The center routes the closest available vehicle to each emergency call and directs the ambulance to the appropriate health facility (4). Such systems, developed by Trimble Navigation of Sunnyvale, Calif., are in use by fire departments and ambulance services in California and Arizona.

The Global Reach of GPS

* The Global Positioning System already is used for navigation by aircraft, boats and motor vehicles. Land surveyors are rapidly trading in their German, Swiss and Japanese optical instruments for GPS devices. Truckers use the system to tabulate state road taxes.

* Eventually, experts say, just about everything that moves--trucks, trains, shipping containers, bulldozers, laptop computers--will contain GPS chips tied into massive information systems.


* The major players in GPS are located in California: Trimble Navigation, Magellan Systems, Ashtech, Rockwell International and Magnavox. GPS also is fostering growth in related industries, such as the software that generates computerized maps--a market in which ESRI of Redlands is the worldwide leader.

* The GPS industry is growing at an estimated 20% to 40% annually and is expected to hit $5 billion to $10 billion in sales by the end of the decade, creating as many as 100,000 new jobs. Experts say the industry will eclipse communications satellites in the commercial use of space.

* The GPS system, which includes 24 satellites and a ground control center, was put in place by the Defense Department. The system provides commercial users their position on Earth within 128 feet. Military users get a more accurate signal, which is used to guide missiles, navigate aircraft and control ground troops.