Irvine’s Case Systems Inc. has had to reinvent a business model built on obsolete products.
The company makes and services call boxes—remember those? The bright yellow boxes below blue signs have for years stood sentinel along California’s major highways.
It’s a business that is going the way of the Dodo now that cell phones have become commonplace.
“The call box business had been very good, but there remains very little growth opportunities,” Case Systems Chief Executive Sebastian Gutierrez said. “It’s a very mature product that’s been out there for a long time.”
That’s been the top challenge for Case, which broke off from Lake Forest’s Comarco Inc., a publicly traded maker of universal chargers for laptops and other consumer electronics.
Case was taken private by Gutierrez in a $3 million management-led buyout in 2008. The company declined to say what its yearly revenue is.
Gutierrez headed the call box division of Comarco for a dozen years before the buyout and now co-owns Case with his wife, Amy, who serves as finance chief.
As part of Comarco, the business had been lagging for years as governments opted not to install and upgrade call boxes, which are seeing less use as more people rely on cell phones to call for roadside help.
Slashed state and city budgets also meant there were fewer funds to build freeways and call boxes.
Through the years, cities instead have opted to deploy fleets of tow trucks that patrol the highways helping out stranded drivers.
Gutierrez said he saw potential in the people at Comarco who knew the ins and outs of the aging call box business.
“You have to see opportunities where other people only see problems,” he said. “What I saw was a very skilled set of workers with some strong competencies in working on devices on the side of the road.”
Soul-Searching
After some soul-searching, Case is getting into the traffic information and management business—a niche part of transportation services that aims to help local governments better manage traffic.
In November, Case bought the Bay Area’s Infotek Wireless Technologies Inc., a small software company, for undisclosed terms. Case folded the buy into a newly formed division, the company’s global technology unit.
“We are nursing it along to try to develop alternative revenue streams,” Gutierrez said. “We think we have a very good thing going and some very good opportunities.”
Infotek Wireless, which had three workers, makes software that that does traffic counting and analysis.
Case combined the software with a device that looks a lot like, well—a call box.
The new, solar-powered device “looks like a call box sitting on the side of the road,” Gutierrez said.
The box, about the size of a mini-fridge, is primarily there to collect traffic data.
“They sit on the side of the freeway and contain data collection equipment to count the number of vehicles that go through a section of road,” Gutierrez said.
The boxes, dubbed “solar traffic monitoring systems,” are designed to help transportation agencies see where traffic gets hung up and where it moves freely at different times.
The boxes tie into existing conductors and other wiring that already are built into California’s roads but aren’t being used much.
Case’s software can forward the traffic data on to government agencies or store it for analysis at a later date. The boxes also can be managed remotely.
The traffic monitoring boxes, which go for $10,000 to $15,000 each, are in testing by the California Department of Transportation.
Some 30 were installed last month on the Foothill (241) Toll Road in South County.
“We don’t have enough coverage out there,” Gutierrez said.
Case’s some 35 workers can use their call-box expertise to sell, install and service the traffic monitoring systems.
“I think there is a real big need on our arterial roads and highways to help improve our traffic congestion problems,” Gutierrez said. “This technology will help us provide those services at a fairly inexpensive rate.”
Meanwhile, the call box business continues to fade.
The boxes themselves still are functional and Case still has contracts to service them.
At its peak in 2000, Comarco’s call box division installed and serviced some 18,000 call boxes in California and 22,000 around the U.S. These days it’s down to about 10,000 in California.
At one point Comarco made the boxes via contract electronics manufacturers in Irvine, Yorba Linda and Anaheim. It began outsourcing most of the manufacturing in 2006.
Call boxes first were installed on Southern California freeways in the 1960s. They couldn’t be deployed in a big way because they were tied to telephone wires.
In the 1980s, Comarco developed the first wireless call boxes that worked a lot like a cell phone does, except it could only call two places: an answering center and a maintenance center.
“We built the capability of monitoring the network as well, not just the ability to make calls from it,” Gutierrez said. “With our technology, the boxes could be programmed and tested remotely.” n
