Light Pens Point Way to Profit : Computers: FTG Data Systems in Stanton controls about 70% of the market for the devices, which are used in the O.J. Simpson trial.
Douglas Lippincott was simply looking for a way to keep his little company, “a defense sub-, sub-, sub-contractor,” alive after his partner left in 1981.
About the same time, another company asked him to design a pointing device that could be used to move information around on the screen of a newfangled thing called a personal computer that International Business Machines Corp. had recently introduced.
It “looked like something quick and dirty to make some money on while I figured out what I really wanted to do,” Lippincott recalled recently.
Instead, the devices, called light pens, have become the lifeblood of his privately held FTG Data Systems.
Though Lippincott and others say the market is small--only $13 million--the Stanton company’s 34 employees take pride in their product.
Both the prosecution and the defense in the O.J. Simpson murder trial are using FTG’s light pens to control computer-based courtroom presentations.
FTG has survived in a long-promising but still unfulfilled market for the pointing devices, while more substantial companies have struggled. PenUltimate Inc. in Irvine, for example, has lost $5.1 million over the past two years as it tried to develop a specialized market for pen-driven systems it designed for traveling salesmen.
Lippincott won’t discuss FTG’s performance, except to say that it’s profitable and that it controls about 70% of the market, which amounts to $9 million in annual revenue for the small firm.
Depending on the model, FTG’s light pens run programs either by tapping a switch at the end of the pen against the glass surface of the video monitor or by touching a button on the pen itself.
A wire connects the pen to a FTG-designed circuit board, which in turn tells the computer’s video control unit where to create an arrow on the screen or what command to activate. A light sensor at the end of the pen determines its location by analyzing how quickly the computer’s video monitor is updating a video image.
Light pens can be used with almost all computer video screens, setting them apart from the technology used in Apple Computer’s popular personal digital assistant, the Newton Messagepad, which can perform only a limited number of functions. FTG sells to both retail and commercial markets, and one of its best-selling models carries a retail price of $298.
While a light pen can substitute for a computer’s mouse, FTG designed its models to work in conjunction with a mouse.
Several years ago, most major computer companies began designing equipment and software to allow users to point directly at the screen to manipulate text, numbers and images, rather than using a mouse.
The expensive technology never caught on. After languishing on store shelves, the first generation of pen computers were sold at deep discounts by retailers last year.
The problem, said Microsoft Corp. product manager Bill Koszewski, was that designers misunderstood expectations. Consumers weren’t eager to trade in their desktops and laptops for other models just to use the pens, he said.
FTG and its two major competitors got a boost from software companies that began writing programs for computer-aided graphics design programs and for programs designed to make commercial equipment like computerized cash registers easier to use.
“There’s an old saying in the computer business that nobody buys hardware. People buy software, and then buy whatever hardware they need to run it,” said Dennis Quiggle, sales manager for HEI Inc., a small firm in Minneapolis that competes with FTG.
HEI and DTI in San Diego are Lippincott’s primary competitors. FTG once collaborated with DTI, but that partnership came to an end two years ago after a disagreement over new products. (DTI executives did not return telephone calls seeking comment.)
To spur his company to further growth, Lippincott knows that, for his company to grow, either the market must expand or the company firm must come up with new products.
He doesn’t rule out a refocusing of the company, but he said that, for now, specializing in one product has been enough.
And while FTG has attracted some publicity for its role in the Simpson case, FTG executives say their pens were also used in a civil case stemming from the 1989 Exxon Valdez oil spill in Alaska’s Prince William Sound.
“We got a bigger kick the last time around,” said Ron Zayas, FTG’s marketing director.
