BusinessWeek Article: GeoVector – Walk This Way

BusinessWeek Article: GeoVector – Walk This Way

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GeoVector: Walk This Way

This digital compass can tell you where you are, and where to walk to get a cup of coffee. It’s available in Japan, but why not the U.S.?

by Kenji Hall, July 20, 2007

You could say John Ellenby has been brainstorming about the ultimate portable gadget for a quarter-century. After leaving Xerox’s (XRX) legendary Palo Alto Research Center (PARC), Ellenby formed startup GRiD in 1980 to develop a computer small enough to fit in a briefcase. The computer, dubbed the GRiD Compass, was one of the world’s first portable computers, and Ellenby was instantly hailed as a tech visionary.

These days, Ellenby, now 66, spends a lot of time jetting between his home in San Francisco and Japan to spread the gospel about his newest idea. The invention acts like an electronic compass in a cell phone and can sync with a global positioning system to—literally—point you in the right direction. Anyone lost in Tokyo’s labyrinthine back streets or dying for a soy-milk latte only has to link to the Net, then choose from a list of restaurants, shops or hotels.

But unlike a car navigation system, which shows you as a moving point on a two-dimensional map, Ellenby’s technology requires no map. Instead, an arrow on the phone’s screen swivels as you walk to keep you going in the right direction—connecting the virtual and real worlds in real time. “That’s very important because most people don’t read maps and much prefer to be guided by a simple arrow,” says Ellenby.

Real-Time Directions

The phone taps into what’s known as a point-of-interest database, which is filled with information linked to places on a map. It might provide directions to the nearest Citibank (C) ATM or reveal where to find the most picturesque place to view the cherry blossoms in spring. Ellenby also has software engineers working on a second-generation version that superimposes the arrow on a 3-D map that’s identical to what you’re seeing directly in front of you.

To make it all happen, Ellenby’s company, GeoVector—which he founded with his two sons, Thomas and Peter—teamed up with CyberMap Japan, the operator of Mapion, one of the country’s most popular map-search Web sites.

The inspiration for a digital compass came to the elder Ellenby and his son Thomas while they were sailing off Mexico’s coast in the early 1990s. The boat was equipped with satellite-based GPS, but the two always used nearby buoys and coastal features to double-check their position. When the elder Ellenby couldn’t locate a distant mark through a pair of binoculars, it got them thinking about how to create a device that would simplify navigation.

“Tom said, ‘I can see it. Why can’t I put a little indicator in my binoculars and give it to you and you can see it?'” says Ellenby. “We had very accurate GPS and a very accurate electronic compass and so we stuck it all together with duct tape on a pair of binoculars and ran a cable to a laptop. Sometime later we started building them.”

A More Advanced Testing Ground

The Ellenbys were soon knocking on the doors of companies that sold a similar device for military fighter jets. A small team of in-house engineers and some of Ellenby’s ex-colleagues at PARC and GRiD collaborated on a prototype of what the father-son duo had envisioned while sailing. About the size of a shoebox, the device let would-be customers see for themselves how well the technology could be adapted for all kinds of uses. By 1998, they began thinking about ways to incorporate the technology into cell phones.

But the U.S. wasn’t the ideal testing ground for the Ellenbys’ gizmo. To reach the volume sales that would make their investment worthwhile, they would need to find a market where millions of people were already gaining access to the Internet via wireless networks and where handset makers were willing to take a chance on an untested technology.

Japan satisfied both requirements. The country’s 98 million cell-phone users have some of the most sophisticated handsets on the planet, and more than three-quarters of them sport a built-in Internet browser to connect over a high-speed third-generation, or 3G, network. In fact, more Japanese go online from a cell phone than a PC. That’s partly the reason Japan led the world in wireless data revenues at $20 billion last year, according to Chetan Sharma Consulting, a technology and strategic consulting firm based in Issaquah, Wash. The country has also traditionally been an early adopter of new technology, which made it the perfect setting for the Ellenbys’ experiment.

Tough Market to Conquer

The hope is that pointing technology can launch a whole new type of location-based advertising. Point to a train station and it automatically pulls up an online site to book train tickets. Point to a billboard and it takes you to the advertiser’s Web site. Point to a movie theater and get a trailer for what’s currently showing. “We believe this is where local search will go,” says Ellenby. “The more focused an advertisement is, the more effective it is.” That’s not all. Ellenby foresees the day when such pointing technology could work in cameras, automatically identifying where you were when you took each photo.

The technology isn’t flawless. Because GeoVector’s compass relies on GPS, it’s only good in places where GPS can reach. “The problem with GPS is you have to be outside,” says Bob Heile, an engineer and serial entrepreneur who is chairman of the ZigBee Alliance, which promotes a short-range wireless standard. “It doesn’t work inside buildings and malls.”

GeoVector isn’t the first company to use Japan as a lab for new wireless applications. Adobe Systems (ADBE), for instance, worked with dominant carrier NTT DoCoMo (NTT) to tweak its Flash software for cell phones. Still, the Ellenbys faced their share of problems and have yet to conquer the Japanese market. At the start they needed handset makers such as Matsushita Electric Industrial (MC), NEC (NIPNY), and Sony Ericsson to understand the technology.

U.S. Carriers Slow on the Uptake

But negotiating directly with them was a sensitive matter because wireless carriers, not manufacturers, dictate what technologies go into handsets. So GeoVector had to quietly reach out to manufacturers while lobbying DoCoMo, KDDI and Softbank.

Only KDDI was interested. About 4 million Sony Ericsson, Kyocera, Sanyo, Hitachi, and Casio phones have been sold with the compass inside since mid-2006, and GeoVector is now in talks with DoCoMo about launching a similar service.

Landing a deal with a U.S. wireless carrier is more complicated and might not happen until early 2008, according to GeoVector officials. That’s partly because, unlike in Japan where carriers have a nationwide network, the U.S. market is fragmented into regional carriers.

And since Japanese handset manufacturers already have experience in cramming the tiny digital compass—about the size of the hole at the top of a retractable pen—into a cell phone, GeoVector may need their help in taking the technology to the U.S.; a factor that could complicate negotiations with U.S. operators. By the time the U.S. gets pointing technology, cell-phone users in Japan may have forgotten what it’s like to be lost.

Hall is BusinessWeek‘s technology correspondent in Tokyo