Integral Technologies Inc. (fka ITKG)

[Sputnik]

Yes, Plastenna!

A Tiny Tech Firm Has Its Antenna Out for Growth
By Christine Nuzum
Dow Jones Newswire

Call it the invisible antenna. Integral Technologies, Inc., an outfit of eight employees in Bellingham, Wash., has developed an antenna that can be blended with plastic, then molded to assume virtually any form.

Made from a highly conductive material that the company declines to identify, the antenna can be as thin as an eighth of an inch. The company said it can be molded into functional components such as bumpers on cars, the rubber seal that holds the windshield in place or the back panel of a cell phone.

The antenna has brought Integral, which six months ago had nominal revenue and only one freshly-signed customer contract, to the attention of General Electric Co. and other large multinational companies. It has hurtled the company's internal revenue projections into hundreds of millions of dollars.

Wireless phones, vehicles that are remotely tracked and security tags in retail clothing stores are among the candidates that Integral sees for its antenna. Some antennas that have been on the market for several years - such as the engraved circuit under the back panel of current Nokia phones and the car radio antenna that is embedded in many windshields - are already virtually " invisible." But Integral claims its antenna offers better performance and is far cheaper to manufacture.

The antenna could be Integral's ticket to graduating from the over-the- counter stock market. According to the company's most optimistic projections, it could drive revenue, which was $15,209 for the fiscal year that ended in June, above $150 million next year.

Tom Aisenbrey, Integral's general manager, developed the substance last spring for a component of the company's low-lying "flat panel" antenna for satellite communications. He then realized it had the conductivity to be an antenna itself, and used it to replace the one on his own Nokia phone. It is now virtually indistinguishable from the back panel of his phone, a plastic casement near the top that protrudes just a fraction of an inch.

"Tom had converted one of the Nokia phones and he called me that afternoon and said, 'Billy, it works,"' recalls Chairman and Chief Executive Bill Robinson. "When we realized what we had, we realized we would need some serious help."

So Mr. Aisenbrey made a cold call to GE Plastics, which led to a manufacturing and marketing deal. In addition to manufacturing the product, GE/Fitch, a joint venture between GE's plastics division and Fitch Co., which is owned by Cordiant Communications Group of the United Kingdom, will help find customers and help with designing different models to suit those customers.

Ravi Mirchandani, regional director at GE/Fitch, says that superior reception and a stronger signal are the antenna's top selling points. The market for such an antenna in cell phones is "absolutely huge," he says. " Even if they sell to 10%, that's a huge market."

Mr. Aisenbrey says that his composite, malleable substance will make today's protruding antennas obsolete. He says it may also be combined with materials like rubber and silicon. He says it may also be combined with materials like rubber and silicon. "We're the only guys that are professing to do this," says Robinson, although he added that other companies have used a similar material in shielding equipment made to protect people from possibly harmful waves emitted from wireless devices. Integral has a provisional patent on the substance and is preparing to file for a permanent patent.

"There's a good deal of research going on with respect to materials that behave like plastics but conduct like metals," says Bert Hall, a technology historian at the University of Toronto. However, he says he did not know of an antenna that behaves like plastic. "I won't call it revolutionary, but I will call it useful," he says.

Mr. Aisenbrey says that because of the highly conductive nature of the material, his phone now has better reception and is usable in places where he previously couldn't get a signal - like four floors underground in a Seattle parking garage. Chief Financial Officer Bill Ince was able to use it during a "dead- zone" stretch of his drive to his lakefront home. The antenna can detect more distant signals than most existing cellular antennas, Aisenbrey explains.

GE/Fitch is starting to market the technology by pitching Mr. Aisenbrey's modification to his Nokia phone to its original manufacturer. According to Integral, Nokia Corp. (NOK) is interested in purchasing the antennas but is awaiting the results of independent lab testing, scheduled for this week. Nokia declined to comment.

Integral says it has also talked to Denso Corp., which makes handsets to be installed in cars. It, like Nokia, wants to see lab test results before pursuing a deal. Denso declined to comment. The company is pitching its antenna to Motorola Inc. and Intel Corp. Intel declined to comment and Motorola didn't return phone calls.

Mr. Robinson says Integral is in discussions with Qualcomm Inc., which declined to comment.

If the antenna lives up to Integral and GE's claims, it could be "a compelling alternative to conventional technologies," says Philip Marshall, a wireless technology analyst with the Yankee Group. He cautions that it would have to be cost-effective to manufacture and not susceptible to significant performance variation when mass produced.

Not included in the print article was the last part of the newswire piece:

Integral estimates profit margins of about 30% on the antennas, including fees paid to GE/Fitch, and hopes to generate a profit immediately. Conservatively, the company estimates net income of $2.4 million, or 8.5 cents a share, on revenue of $20 million next year, according to Ron Manness, who serves on the company's board of advisors. Its most optimistic projection for next year is net income of $31.8 million, or $1.14 a share, on revenue of $183.8 million.

Over the next five years, Integral hopes to generate between $775 million and $2.2 billion in compounded revenue, depending on the launch and acceptance of the much-anticipated wireless technologies such as Bluetooth, which will provide a wireless connection between various digital devices such as computers, cell phones and some home appliances; global positioning satellite vehicle tracking and Web-surfing cell phones.

Cell phone antennas will be priced at about 25 cents apiece, Ince says. Integral is pinning the bulk of its expected revenue in other markets, where lack of competition will allow it to charge higher prices.

Integral hopes to generate about half its revenue from the market for global positioning satellite tracking of vehicles, an area where Orbcomm Ltd., a satellite company that emerged from a bankruptcy restructuring earlier this year, is already a customer for the company's flat panel antennas.

More expensive to make than cell phone antennas, those antennas are expected to sell for about $90 apiece, according to Ince.

Dean Brickerd, director of technical services at Orbcomm, says he hasn't seen anything similar to Integral's polymorphous antenna.

"It is pretty amazing," he says. "You could have an antenna that conformably matches just about anything you could conceive of fitting it to."

Orbcomm sells services to track vehicles and large transport containers through its constellation of low earth orbit satellites.

The company is preparing to test Integral's new antennas for tracking containers, which are immense rectangular cartons, often hauled on the backs of trailers, says Brickerd. When transported by ship, they are stacked on top of one another, then side by side, leaving no room for a protruding antenna. Integral's new antenna could lie flat on a side of a container, and perhaps eventually, be integrated into the rubber sealant on its surface.