Comarco Sheds Old Core Business to Focus on Wireless; Power Pack Debuts
Santa Ana-based Comarco Inc., once a defense industry stalwart, soon will be out of defense altogether. It is selling three of its units,including its former core military business,to focus on its wireless technology products.
Comarco is looking to spin off its military information technology testing, information technology staffing and airport lease management businesses.
That will leave the Comarco Wireless Technologies unit. CWT provides test equipment and services for cellular service providers, makes the freeway-side call boxes that help stranded motorists, and just introduced its newest product, ChargeSource, a power source and battery charger for portable electronic devices such as cell phones, laptops, camcorders and printers.
Don Bailey, Comarco’s president and CEO, said CWT’s best product is the testing equipment and services it provides for cellular service providers.
“It s our biggest marketplace,” Bailey said.
Comarco offers services and products to help cell service providers find and solve signal problems, but Bailey thinks its technology will go into more and different applications in the future.
“The world is becoming more wireless. A greater number of people are going to use wireless networks,” Bailey said. CWT is developing and testing networks and is developing its own products. “There are a tremendous number of applications for it [wireless networks],” Bailey said.
Call-Box Specialty
CWT also manufactures the freeway-side call boxes that help stranded motorists. In 1997 CWT bought GTE’s call box product line and now is responsible for 100% of the call boxes around.
“All the call boxes are ours,” Bailey said. Comarco also provides the service to upkeep the call boxes, “which is the most visible business we have,” Bailey said.
The call boxes that CWT produces are self-contained, running on solar power with a backup battery. The units contain a computer and a communication device and Bailey said there are more applications for the unit than just for distressed motorists.
“They are popular at universities, movie theatre parking lots, port authorities, on bridges and up in the mountains,” Bailey said.
Comarco also is looking to use the boxes for traffic data and weather monitoring and is researching a toll-gathering application.
Bailey said CWT has been growing at a rate of 25% to 30% annually.
Comarco last week reported earnings from continuing operations of $1.5 million on revenue of $12.0 million for the fiscal third quarter ended Oct. 31, compared with earnings of $1.1 million on revenue of $8.4 million in the prior third quarter.
Rapid Growth
Bailey said CWT has had to move to a new facility every 18 months because of the growth. Comarco also is having difficulty, like many other OC tech firms, in growing its staff, he said.
“It’s hard to find good engineers,” Bailey said. “Finding capital and space is easier than finding people.”
Comarco started off providing information technology services and engineering for the Army and Air Force, but the breakup of the Eastern Bloc and the cuts in defense spending prompted the company to move into other fields.
“We saw that our marketplace was shrinking and we decided to diversify,” Bailey said. “The hardest thing was to develop a product the market would buy.”
Bailey said it was difficult to adapt to a price-sensitive, free market, a change from government-related work.
In the late ’80s, the call box business started growing for Comarco, and the company also started an information technology staffing company and began managing airport leases,all part of a push to diversify.
“But they didn’t take off like the wireless communications,” Bailey said.
The company had put money into research and development and found that the test equipment was something it wanted to get into. After the testing business started growing, Comarco separated it as Comarco Wireless Technologies in 1993. In 1997 CWT bought GTE’s call box business, thus controlling the market.
New Products
Now CWT is rolling out the ChargeSource. It is designed to make charging and operating portable electronic devices more convenient; it is compatible with almost all electronic devices requiring charging.
CWT has already licensed out some distribution rights to Targus, a distributor of laptop cases, but will soon start marketing the product itself, via print and web advertising, telemarketing and Comarco’s web site.
CWT is looking for ChargeSource to be a big source of revenue, hoping to tap into the 20 million or so consumers who own both a laptop and cell phone. CWT is targeting only North America, but will go into the European and Asian markets after the product is established here, Bailey said. n
