Subject: [NEXTEL-1] AirClic keeps track of school kids

From: [email-masked]
Date: Mon, 19 Apr 2004 13:32:20 -0400

EXCLUSIVE REPORTS
>From the April 16, 2004 print edition
AirClic keeps track of school kids
Peter Key Staff Writer

NEWTOWN -- Starting next month, locally based AirClic Inc. will help 
Lower Merion School District keep track of some of its youngest 
students. 

The district will be testing bar-code technology developed by 
AirClic on two buses that transport about 90 children to the Merion 
Elementary School. 

Children whose parents let them participate in the test will be 
issued an ID card with a unique bar code on it. When they get on and 
off their bus, they'll pass their card in front of a bar-code 
scanner attached to a GPS-enabled mobile phone. 

If Michael Andre, Lower Merion's transportation supervisor, has a 
question about when and where the participating students boarded or 
left their bus, all he has to do visit a special Web site; the 
answer will be there. 

The trial will run for one month. If it's successful, Lower Merion 
will consider implementing the system, probably in the 2005-'06 
school year. 

"Any time you implement something this big, it takes time to work 
through all the nuts and bolts of it," Andre said. 

The Spring Independent School District outside Houston has been 
testing a similar system since February. The test is going so well 
that Spring is looking into expanding the program to all its 
elementary school students next year and three other districts in 
the Houston area want to start similar programs for their students. 

"It's a sales person's dream," said Jeffrey Mitchell, the account 
executive for Reston, Va.-based wireless firm Nextel Communications 
Inc. who helped set up the Spring program. "My phone hasn't stopped 
ringing." 

In all, 70 organizations are testing AirClic's technology, according 
to John Parker, one of two presidents of AirClic. 

Additionally, Parker said, AirClic has more than 50 customers of its 
services, which Nextel agreed to co-market last May. 

Those customers include giant trash hauler Waste Management Inc., 
which is using AirClic's technology to audit its routes in Los 
Angeles, and Eastern Connection, a Woburn, Mass.-based company that 
is the largest business-to-business parcel hauler on the East Coast. 

AirClic's technology gives Eastern Connection many of the package-
tracking capabilities that Federal Express and UPS have without 
requiring it to build their massive information-technology 
infrastructures, said Peter Stewart, a senior product manager in 
Nextel's business solutions group. 

Before Nextel began marketing services using AirClic's technology, 
devices that perform the package-tracking functions of the GPS-
enabled phones with scanners used by Eastern Connection's delivery 
people would have cost $3,000 to $4,000, Stewart said. 

Now, customers of the services can pay as little as nothing for 
their phones, if Nextel thinks they'll spend a lot on wireless data 
transmission, and their monthly Nextel bills will depend on how much 
transmitting and talking their employees do. The scanners that 
attach to the phones will cost them $200 to $250, said Peter Ritz, 
AirClic's other president, who is also the company's co-founder. 
Their monthly bill from AirClic for its services, which include 
providing access to their data on the Web, will range from $30 to 
$50 per phone, Ritz said. 

AirClic employs 30, but it has a lot of reach because of its 
partners. In addition to Nextel, those include wireless phone maker 
Motorola Inc. and bar-code-scanner maker Symbol Technologies Inc. 

The company has ambitious plans to increase its direct reach. It 
wants to have a sales employee or representative in every city with 
a National Football League team and Los Angeles in the next 18 
months, Ritz said. 

AirClic originally thought its technology would be used by consumers 
to scan bar codes in magazine and newspaper ads and articles to get 
information and make purchases. 

In 2000, AirClic, Motorola, Symbol and a spin-off from Swedish 
wireless phone maker Telefonaktiebolaget LM Ericsson agreed to form 
a new company to develop AirClic's technology. Among them, they 
planned to contribute $500 million in money, technology and 
intellectual property to the new firm. 

The new company proved too hard to put together and was scrapped. 
But in January 2001, AirClic received a commitment for $290 million 
in venture capital from Symbol, Motorola, Ericsson's venture arm and 
a group of private investors led by the Goldman Sachs Group Inc. It 
also named Harvey Golub, who had just retired as chief executive 
officer of American Express Co., as its chairman and Phillip J. 
Reise, who had worked under Golub at American Express, as CEO. 

By then, AirClic was on its way to changing its business model to 
one that was not consumer-focused. Despite the change, it struggled. 
It wound up only drawing down $72 million of the venture money 
committed to it and used that to survive until last year when it 
reorganized and recapitalized. 

Reise left in February 2003 and a month later, AirClic took its 
current management structure with Parker, who joined the company in 
May 2000, and Ritz as co-presidents. The company also received 
additional funding from its original investors, although it won't 
say how much. 

Since both events, AirClic has been picking up speed, in part 
because of its partnership with Nextel, which is promoting its 
services heavily. 

"We have many different levels of partnership and AirClic is in the 
top level," Stewart said. 

AirClic still isn't turning a profit, but Parker expects it to start 
breaking even on a cash-flow basis by the third quarter. 

The widespread adoption of wireless data transmission by U.S. 
businesses is helping its cause. The Yankee Group, a Boston-based 
telecommunications industry analyst, expects half of U.S. 
corporations will be using wireless data transmission within the 
next two years. 

Parker thinks AirClic can capitalize on that by marketing its 
services to businesses whose employees make field calls. AirClic's 
services allow companies to reduce their paperwork by enabling their 
employees to scan information into their computer systems, rather 
writing the information on forms, he said. 

AirClic's services also allow employers to keep tabs on where their 
workers are, what they're doing and how long they're taking to do 
it, Parker said. 

"I can't think of an area where we don't really need to have 
visibility into what the people are doing," he said. 

http://philadelphia.bizjournals.com/philadelphia/stories/2004/04/19/story6.html

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