Hillcrest’s ‘air mouse’ flies after 18 months of thought

Rockville company gives users a new way to navigate digital media

Unlike the familiar computer mouse, the Hillcrest mouse doesn’t need a flat surface to point and move a cursor on the TV screen. Instead, it’s a handheld ‘‘air mouse,” said Simpkins, meaning that it is equipped with Hillcrest’s patented Freespace motion-control technology.

Simpkins unabashedly called Hillcrest ‘‘one of the few places in the world, frankly, where innovation is taking place in interactive television.”

The company recently signed deals with major companies to sell the Freespace mouse technology along with the company’s companion software. The software, called HoME, allows users to select among a wide range of video, music and Internet entertainment, even cartoons, on a digital TV.

Simpkins won’t reveal the names of those first customers until their ‘‘programming platforms” are finished over the next 12 months. But he said it would not be surprising if they are among large consumer electronic companies such as Sony, Samsung, Apple and Phillips, and television providers such as Comcast, Time Warner and DirecTV.

The company is currently focused on programming platforms that bring everyday Web sites to television sets.

Hillcrest Labs won the Editor’s Choice award by Popular Mechanics at the 2007 Consumer Electronics Show. And its Freespace technology received part of the International Consumer Electronics Association’s Innovations Design and Engineering Award in 2006.

The privately owned company declines to share financial figures, but the company is generating revenues for the second straight year, according to Parag Sheth, marketing vice president.

James O'Neil, technology editor for TV Technology magazine, said the Freespace device “looks to be sound and if it catches on, it could be promising.“

Last month, Hillcrest’s first announced customer, Logitech, licensed the Freespace mouse technology, but not the HoME software. Logitech is a leading maker of computer mice. Logitech is using the Hillcrest invention in its new Logitech MX Air Rechargeable Cordless Air Mouse to help people navigate television shows, music, online movies, photos and other applications on computers.

‘‘With more and more people using their PCs to watch videos and listen to music, we wanted to create a product that would allow people to adjust the volume, change a song or browse online videos without having to return to the desk,” said Erik Charlton, a marketing director at Logitech.

The Pew Internet and American Life Project reported in July that 57 percent of Internet users have watched videos online. And, according to Internet researcher JupiterResearch, Americans spent $800 million to download digital music in 2006, a number that could reach $2.5 billion by 2011.

Simpkins’ broader goal, however, is to put Hillcrest’s technology directly into the TV set ‘‘right in the living room, because it’s the best screen in the house and where people really don’t want to hook up a computer to their TV.”

There are now more than 48 million homes in the world with high-definition digital televisions that would be compatible with Hillcrest’s HoME, according to Informa Telecoms and Media, an online publication.

Hillcrest’s unusual technology is itself a product of an equally unorthodox business launch.

After founding Hillcrest in 2001, Simpkins and 11 colleagues just sat on a pile of money for 18 months, thinking, he said.

The year before, he had sold his 10-year-old company, Salix Technology, an early Internet telephone company, for $300 million to Tell Labs, and within months financed a thoughtful beginning to Hillcrest.

‘‘At Hillcrest, we decided to take a very different approach and create a formal think tank we called Hillcrest University,” Simpkins said.

The virtual school, with managers acting as professors and others as graduate students, was modeled after the invention teams created by Simpkins’ idol, Thomas Edison, a century ago. The idea was to study business and technical trends and try to figure out a way to prognosticate the future. They postulated on tasks such as ‘‘predict telecommunications regulations in the future.”

‘‘It was fun. It is not every day that you just get to sit around and think,” he said. ‘‘And we can hopefully put that thinking to good use.” After creating and mulling over more than 10,000 PowerPoint slides, they identified three trends for the future:

*The Internet would likely shift from being information-centered to entertainment-centered.

*Digital television would become ubiquitous.

*Digital media would explode.

‘‘Remember, now, this was in 2001. There was virtually no Internet video and no broadband, and flat-screen TVs were expensive and for rich people,” Simpkins said.

They came up with a business plan that anticipated the growth of digital media and broadband Internet, as well as what is called compression technology to limit digital bits needed to create pixels in screened images, such the jpeg compression.

Once organized, Hillcrest set a course to creating new tools for consumers to manage their own media, Simpkins said.

Three venture capital firms in Maryland are backing Hillcrest: New Enterprise Associates, Columbia Capital and Grotech Capital.

The company plans to go public ‘‘reasonably soon,” Simpkins said, because, ‘‘for a company with 80 people, those are a lot of mouths to feed.

‘‘But the phase we are in is now is business building,” he said. ‘‘In order to go public you need a steady flow of revenues and growing and growing profits or visibility to profitability.”

Being in Rockville is advantageous, said Simpkins, with the growth of what he terms a second wave of dotcom growth that will be media driven.

‘‘We already have great depth of media in this area,” he said, mentioning XM Radio and Black Entertainment Television, both based in Washington, D.C., as well as several satellite network companies.

Hillcrest is a name Simpkins chose to honor his father, an entrepreneur who opened the last in his chain of five-and-dime stores in the New York City neighborhood called Hillcrest.