Our customers are businesses and individuals who purchase business projector systems for "presentation environments" such as boardrooms, conference rooms, lecture halls, home entertainment systems, etc. Such environments are ideal for integration of Brilliant Points technology for a fraction of the cost of the projector system itself.
Research firm Stanford Resources estimates that in 2001, worldwide shipments of business projectors reached 1,400,000 units. They also forecast this market to grow to 4,500,000 units by 2007. InFocus forecasts that projector system shipments for home entertainment systems will exceed 2,500,000 units within three years.
Brilliant Points technology is a "market forming" technology, in that this technology (optical control of a presentation or computer through the use of video capture) has only recently become possible, but is instantly recognized as useful by people who give business presentations. Data is available giving the size of the presentation market, but acceptance of this new technology is difficult to predict using existing data. Preliminary response from user tests indicates ready acceptance as long as the price-point is not excessive, so we feel confident that the target of $50 per presentation seat is readily achieved, with higher targets still possible without significantly affecting demand.
The Company expects to license its technology to various electronic equipment manufacturers in the United States, Europe, and Japan. Initially, it will seek licensing agreements on a limited basis in first the United States and then in Japan. Europe will follow after the other two markets are established.
The Company will seek to license its technology first with presentation device manufacturers and laser pointing device manufacturers, but plans to expand to include manufacturers of personal computer input devices, digital cameras and webcams, and digital camcorders. Brilliant Points believes that seeking strategic partnerships to bundle its software with these manufacturers, along with targeted marketing to presenters and educators will allow it to achieve penetration in the market. There is also significant opportunity in the gaming industry for Brilliant Points' technology later in the product lifecycle.
The Company expects to methodically develop its marketing channels through use of strategic partnerships with presentation input device manufacturers. The Company will seek partnerships with companies in the United States and Japan, including presentation and computer device makers, such as Logitech, InFocus, Toshiba, HP, Dell, Microsoft, Belkin, Samsung, Hitachi and others. In addition, many of the largest makers of laser pointers today include 3M, Acme United, Clearline, Laserlyte and Fortune Brands. With the diverse and broad product offerings, the Company feels that licensing relationships established now with these companies will provide many leveragable benefits in the future.
The Company's business development groups will pursue opportunities in the presentation market both nationally and internationally. Nationally, the Company will develop distribution channels with several of the companies listed above in the U.S. It will focus its efforts on three target industries, presentation (and computer) input device companies, laser pointing device companies, and industrial laser application companies, in that order.
Simultaneously, Brilliant Points is considering a business development relationship with a Japanese business development company that develops business partnerships with large Japanese conglomerates who seek to capture United States developed technologies.
A presentation seat is defined as a computer and a projector. There are two distinct environments in which they are used: business presentation and home entertainment.
Note that future growth and installed base estimates are intentionally simplified to aid in calculations. We realize that some of the "new" data will, in fact, be replacements for "installed base", especially as we reach four to five years out, but we account for this fact by stipulating that upgrade kit sales will increase and peak around years four to five, and simultaneously estimating that we will only achieve penetration of 20 to 30 percent of this installed base of 1,400,000 units before it begins to be replaced under future growth sales.
Placing Brilliant Points technology into a presentation seat requires addition of a camera (high-quality Webcam, approx. $100 to $200), an optical pointer (approx. $50), and Brilliant Points software (approx. $50 to $150), for a combined total ($200 to $400) which is a small fraction of the cost of the computer and projector combined ($4,000 to $30,000). We feel that due to the low incremental cost for upgrading and the substantial enhancement which accrues, this upgrade path will be quickly accepted into existing presentation seats.
We are confident that businesses will seek to acquire Brilliant Points technology as they see our technology in use in the marketplace.
Brilliant Points is aware of two companies that independently, after the initial Brilliant Points patent application was submitted, developed technology which is believed to infringe on the Brilliant Points patent. These companies are IC-Tech, website at www.ictech.com, with their LightMouse™ technology, and InfoValley, website at www.infovalley.com, with their LaserDraw™ technology. Both of these companies are small, and funded primarily through SBIR research grants. The Company has initiated contact with these companies, informing them of probable infringement, and IC-Tech has responded indicating a desire to license. InfoValley has yet to respond and we are pursuing legal and other options.
Neither IC-Tech nor InfoValley has captured the scope and breadth of the Brilliant Points patent in their efforts, and we do not expect significant revenue from either due to their market positions.
Brilliant Points has initiated contact with Logitech Corporation's New Business Ventures Group because they manufacture and distribute both a good quality, low-cost webcam, as well as a radio frequency (RF) mouse which is bluetooth-based and also contains an embedded laser pointer for item emphasis within a presentation. A licensing agreement with a company such as Logitech makes strong business sense for both Brilliant Points as well as Logitech because both companies get to play off of the strengths of the other and can bring new technology to market rapidly without significant expense on the part of either. IOGEAR is another input-device company which has designed a bluetooth-based remote trackball with an integrated laser pointer, very similar to the Logitech device.
The Company intends to seek other potential partners for discussions such as those entered into with Logitech, but plans on sales of update kits as the primary revenue stream for the first 18 months.
The bluetooth technology is a short-range (dozens of feet) RF technology designed for multiple-wireless-device use. It can be considered by some to be competing technology because input devices (e.g. mouse, trackball, touchpad, etc.) designed with this technology also allow remote control of a computer presentation. Bluetooth technology, however, has a maximum receiver range of about 30 feet, with high-reliability range restricted to 10 feet or less, especially in the presence of RF interference or significant numbers of same-band transmitters. This restriction means that the computer with its bluetooth receiver is forced to be in proximity to the presenter, while the projector may need to be much further back in order to provide sufficient "throw" to give a large display area. These same restrictions apply to other RF-based wireless device technologies. All of them experience difficulty as more and more same-technology devices are used within a given area, and all of them are more appropriate to local use of a computer and network than for remote control of a presentation system from possibly hundreds of feet away.
Brilliant Points technology has no RF-like range restrictions: if the pointer is visible, the system works, regardless of whether the pointer is a foot away or a mile away. The computer, projector, and Webcam are conveniently located on one area, and the presenter is free to roam the area without concerns of RF range or "trip wires" scattered around the room. Optical systems are also typically lower-power devices since the radiated output is restricted to a narrow beam rather than radiated omnidirectionally as in bluetooth. Because of this, batteries in remote input devices will likely last much longer in Brilliant Points technology-based devices. Furthermore, optical systems are inherently noise immune and unaffected by even extreme amounts of RF interference. Because Brilliant Points technology is optical, and unidirectional, using a pointer to control a computer via the Company's technology is a significantly different control system than one involving networking systems, or connecting a computer to peripherals such as printers, disk drives, displays, projectors, etc., all of which need to be omnidirectional if wireless, or wired. Multiple-same-technology-device issues will not arise during the use of Brilliant Points technology. As a final note, it should be recognized that in spite of providing computer-like control via bluetooth, the developers of these devices (e.g. Logitech and IOGEAR) still saw a significant market advantage to incorporating the laser pointer into the device, in obvious deference to its readily demonstrated usefulness during a presentation.
In summary, while companies such as Logitech and IOGEAR, which implement input devices using bluetooth or other RF-type mechanisms, may appear to some to be a threat to Brilliant Points, we see them as additional licensing opportunities.