Intellipen: Something to write home about

Ra’anana-based start-up Intellipen wants to take advantage of the drawbacks of the existing e-pen solutions (mostly the price) by developing its own electronic wireless pen.

Current solutions in the electronic pen field are rather expensive and do not yet appeal to a wide market. The price is in the vicinity of $100, because you can’t just buy an e-pen and connect it to the computer. The e-pen comes with a special tablet, and the pen can only write on the tablet, which tells the computer the location at which the pen is writing. You can’t scribble anywhere with the pen; you have to use the tablet. Other solutions involve a special laser pen that can write anywhere, but price is factor for them, too.

Another Israeli player in the smart pen field is Herzliya-based OTM Technologies (formerly Gou Lite), founded in 1998, which has more sophisticated technology than that of Intellipen. “The difference between Intellipen and other technologies is the price,” says president and CEO Amir Fogel. “I want to appeal to a market that can buy our pen as a tool for a child to learn how to write, without going bankrupt. The whole thing should cost the consumer only $30-35, compared with the competing solutions, which can cost $100-200.”

As of now, Intellipen has completed development of its first product and is now developing its next pen, which will be thinner and include wireless connectivity improvements. The original pen was designed for right-handed people. The company wants to adjust development of its next pen for the use of left-handed people.

The company’s pen works just like a normal mouse. There is a revolving ball at the end of the pen, which broadcasts data to the computer on the direction in which it is rolling on both the x and y axes. Pressing the pen is comparable to pressing the left mouse control. What is unique to the pen is its ability to identify a third (z) axis of movement, by measuring the force with which the pen is raised from the surface. Each of us has a different handwriting, and we also differ in the force of the pressure we apply to the pen.

Why is this important? Because Intellipen wants to make the device an integral part of the digital signature law, which requires the identification of a signature on three axes. Fogel visited “one of the world’s largest banks” this week, which took an interest in using the pen in its branches, under the new digital signature law.

Intellipen is also considering the addition of a means of biometric identification to the pen.

Intellipen is now negotiating with several software companies that develop technology for reading handwriting. One of these is Paragon Software, whose software accommodates 28 European languages, adapted for all European operating systems computer languages. Intellipen also has an agreement with Israeli company Super-M, under which the two companies will market one package that includes Intellipen’s electronic pen and Super-M’s software for learning handwriting in English.

Another application for the pen is software that teaches children handwriting. According to Fogel, this software is cheaper than currently existing programs, which require special hardware computer peripherals to write on.

The main current limitation of the pen is its infrared connectivity, which requires a line of sight between the computer and the pen. In the future, the company plans to use other wireless technologies for the pen, such as RF and Bluetooth.

Fogel is currently making the rounds between large global corporations, trying to push his pen. He asserts that a large aerospace manufacturer has expressed interest in facilitating use of the electronic pen on its flights. Another field Fogel is attempting to enter is interactive television.

”One of the reasons why interactive television has not been successful around the world is the need for a keyboard and mouse for the TV,” Fogel says. “After sitting for hours with a keyboard every day in an office, people don’t want one in their living room. He adds that a Chinese set-up box manufacturer has expressed interest in the pen. Intellipen will add more features to the pen for the purpose, including television control (volume control, channel browser, and so forth).

In any case, the first market Intellipen is trying to penetrate is PCs. Fogel says many countries are “standing in line” to order the pen. “I didn’t expect things to snowball to this extent,” he adds.

Intellipen recently signed a $4.35 million distribution agreement with European company Omnia Electronics Trade. It is planned to distribute 300,000 units of the new product in Switzerland, Austria, and Germany in the first phase of the agreement.

Intellipen was founded in 2000 by application manager Rani Shapira, who obtained an initial investment from the 4HighTech fund. Shapira’s first pen was connected by a computer cable and presented the text on a small screen on the pen. The idea didn’t take off. Shapira later combined with outsource development manager Yuval Singer from Singer Instruments and Control, and the two began development of what became the current version of the pen.

The cost to the consumer is $35, which means that Intellipen has to manufacture the pen at a cost of only a few dollars. “We can certainly reach a per-unit cost of a few dollars, provided we keep things under tight control and watch the company’s expenses. Spending’s easy; making money’s a little more difficult,” says Fogel.

The company payroll includes only five employees, after laying off several when outsourcing was instituted. Intellipen has also been saving money for the past four months by housing its employees in the offices of the fund that gave the company financing.

Intellipen has raised $550,000 to date, and now needs another $5 million, among other things to set up a manufacturing plant.

Published by Israel's Business Arena on February 4, 2002