CellGuide helps you find yourself

CellGuide is developing a GPS receiver that can be installed in a cellular telephone battery. The device – a satellite-assisted Big Brother - tells you where you are.

There is a lot of talk about location-based services, and the first signs of its arrival can already be seen: there are now devices that locate the nearest taxi stand, ATM, etc. To borrow a term from the Internet boom years, these are "pull", not "push" services – if you want to order a taxi from the nearest stand, you have to dial the relevant code into your telephone. In the future, we will define our request, and receive these service without any further input. One such promising application is Partner Communications’s (Nasdaq: PTNR ) iNearU service, that notifies a person when his friends are near him.

However, before discussing technological applications, it is important to state that the vision involves using information contained in the cellular telephone's battery for identification purposes. This means the network knows the device’s location while the device is on and broadcasting. The location determined by the network is imprecise, to put it mildly, ranging from a radius of hundreds of meters to several kilometers, depending on the cell’s handling area. The fewer the number of people in the area, the greater the range. Not surprisingly, the greatest range is offered in the desert.

GPS provides the most logical solution to the problem. GPS is precise to within a radius of a few to a few hundred meters. Its disadvantage is that users must buy an expensive, separate GPS receiver, making the system unfeasible.

Benefon recently began selling a solution that combines a cellular telephone and GPS receiver. Experienced users say the device is heavier than an ordinary cellular telephone, and point out that it only operates on a GSM network.

Israeli start-up CellGuide has come up with a different solution. But before detailing its wonders, let us begin with a brief course on the various types of GPS. The US Army first developed GPS as a means of locating ships and aircraft. The US Army approved a system with a lower degree of precision for civilian use, but later lifted the restriction, under pressure from the public and authorities. The identification range improved, but it was still difficult to locate moving objects. The Europeans decided not to rely on the Americans and their idiosyncrasies, and will launch their own satellite project soon, called “Galileo”.

There are now three main ways to provide location services using satellites: GPS, which triangulates the distance from the device to several satellites; EOTD, which triangulates the distance from the device to ground stations; and Assisted GPS (AGPS). To cut to the chase, CellGuide claims AGPS is the best system, partly because it is100 times more precise than ordinary GPS, and because it uses 95% less power.

CellGuide was founded in November 2000 by Israel Military Industries graduates CEO Joseph Nir, CTO Baruch Shayevits and R&D director Hanoch Cohen. They chose the path of integration, and elected to develop a GPS chip that would be able to support both GPS and AGPS. CellGuide VP for Marketing and Business Development Nati Freiberg says, “For now, we have decided to focus on an AGPS-based product, even though, from a technical standpoint, we could offer a solution combining both systems.’

CellGuide’s solution can be installed in existing cellular telephone chips, which means they can be installed in current generation telephones, as well as next generation ones. Freiberg says CellGuide’s chip requires only 100 Mips (million instructions per second) of the 400 Mips produced by next generation chips.

Another advantage that CellGuide is proud of its extremely fast time to market, which it achieved because the company’s chips are derived from existing chips, such as those of Texas Instruments (NYSE: TXN) and Motorla (NYSE: MOT), eliminating the need for complex and time-consuming ASIC programming. Satellite use is free, saving huge infrastructure costs, unlike the Ituran system, which requires an independent location system. Since the Europeans are quite strict about protecting the environment, they would cause difficulties for any service provider wanting to install ground antennae, another factor favoring heavenly solutions.

CellGuide is relying on two basic products. One product is a sensor installed in the cellular telephone battery. CellGuide is now presenting a prototype that has been installed in Nokia’s 5/6/7100 series batteries, which costs $150, including accessories. An external manufacturer is supposed to start mass producing the sensor in a few months.

The second product that will be revealed later is a tracker; a kind of GPS that includes minimal cellular software. The device can be used to call only one or two numbers, and includes distress buttons. CellGuide is currently participating in a €4 million project of the European Fifth Framework Program for R&D, consisting of the development of a location system for the elderly and crippled. The device will first be offered in Germany, and later throughout Europe.

The service provider (the cellular telephony company or a company acting on its behalf) can determine the rate at which the user’s location is updated, by sending an SMS message to the CellGuide server. Since this costs money, services can be sorted according to the frequency of updates they require. It is reasonable to assume that the regular location services would work well with updates every 10 minutes while the user is stationary, and every few seconds while he is in motion, and in need of various location services.

Costomers for these services are varied, and include Red Cross and other search and rescue organizations, emergency service providers such as the police, Magen David Adom and fire departments, and families with relatives requiring supervision. The common factor for them all is the need for updates on the location of the user, but they do not necessarily all need to flood him with ads. At the other end of the spectrum are organizational customers that would be delighted to know the location of their staffs at all times.

Qualcomm (Nasdaq: QCOM) is the company’s only serious rival; indeed it is almost the sole competitor. Freiberg is unconcerned, “First, I would be pleased to compete against Qualcomm. Second, our solution works on all chips regardless of the cellular network’s broadcasting system, while Qualcomm is developing chips only for the current and future versions of this broadcasting system.”

CellGuide is also relying on the conflict (not to mention the hatred) between Qualcomm on the one hand and Ericsson (Nasdaq: ERICY) and Nokia (Nasdaq: NOK) on the other. The bitterness between the companies is hurting Qualcomm’s ability to sell its product to them.

CellGuide expects to hold another financing round in the coming months, and plans to bring in strategic investors. The company predicts that it will have several million dollars in sales in 2002, and break even in 2003. Besides making direct sales to organizations like the ones mentioned above, CellGuide plans to cooperate with the cellular operators to provide the batteries as part of their products. CellGuide has 20 employees.

Freiberg believes the marketing of cellular telephones that can locate elderly individuals will increase the cellular operators’ penetration among that population segment, The only problem, which is solvable, is peoples’ legal right to privacy, the big brother syndrome that worries civil rights organizations. Since every user can decide whether or not to use the battery when buying his telephone, and whether to activate the services based on it, the problem can be solved.

Name: CellGuide

Founded: November 1999

Founders: Joseph Nir, Baruch Shayevits and Hanoch Cohen

Product: An Assisted GPS (AGPS)-based location-enabling chip

Financing rounds: Less than $10 million in two rounds.

Investors: Beeson Gregory investment bank of the UK, Samson Ventures, CAP Ventures, private US and European investors.

Employees: 20

Website: www.cell-guide.com

Published by Israel's Business Arena on 20 December 2001

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