- The Washington Times - Monday, April 15, 2002

Even a former governor couldn't inject life into the stock price of Xybernaut Corp. last week.
The Fairfax-based developer of "wearable computer" technology appointed former Virginia Gov. James S. Gilmore III to its board of directors. But the news did little to heighten investor interest in shares of the firm, which have been trading at less than $2 for most of the year.
Shares of Xybernaut closed at $1.50 on the Nasdaq Friday.
Mr. Gilmore's presence on the Xybernaut board is seen as a strategic move to improve the company's visibility in the area of security and anti-terrorism measures. Mr. Gilmore is now the chairman of the Congressional Advisory Panel to Assess Weapons of Mass Destruction and Democratic Response.
"Jim's commitment and leadership in the areas of electronic commerce, national defense, anti-terrorism, security and law enforcement make him a strong addition to the Xybernaut board," says Edward Newman, Xybernaut's chairman, president and chief executive officer.
Xybernaut's "wearable computer" technologies are designed to improve work productivity by allowing people to use a computer without the need for a bulky monitor or keyboard. For instance, a telephone line worker could check information on a visorlike monitor, while punching in information on a small keyboard attached to his or her wrist.
The company's latest product is the Poma, a Hitachi-manufactured computer featuring a small one-inch monitor that sits under the eye, selling for about $1,500. It is technology that many analysts believe will be widely used, but not for several years until prices go down and technologies improve. And whether or not it will help in the area of homeland security is not clear.
Analysts say that if the key to stopping terrorism is information gathering and dissemination, wearable computers are presently no more useful than cell phones or Palm Pilots.
The appointment of Mr. Gilmore follows news that Xybernaut will cut jobs and cutting expenses to make up for losses of $32 million last year. The company plans to cut annual spending by about 50 percent by reducing marketing expenditures and renegotiating and even canceling some contracts. The company projects $2.8 million in revenues for the first quarter of 2002, a 23 percent increase over the like quarter last year.
"Continued operating losses have severely impacted the company's financial position and liquidity," Xybernaut said in its annual report to the Securities and Exchange Commission.
Analysts say that despite the company's recent struggles, it remains a leader in the wearable computer market. The big question is how quickly the technology will catch on.
Jack Gold, a wireless analyst with the META Group in Stamford, Conn., says computing devices such as personal data assistants, Palm Pilots and even cell phones are early forms of wearable computers, and their widespread use is only a few years away. But he says more must be done to provide the back-end systems and information needed to make wearable computers worth having.
"Right now, we're not very good at generating that information," Mr. Gold says.
What's more, the wireless network needed to support these devices must be improved before wearable computers can catch on, Mr. Gold says.


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