RESEARCH TRIANGLE PARK — Even as sales of hand-held computing devices fell in 2002, Tablet PCs were introduced and sales took off. So the people at Mi-Co are pretty confident that their mobile data capture software still has a pretty bright future.

“It is a fact that there are a lot of organizations evaluating the new technologies now, but the hardware manufacturers are beginning to see these pilots turn into substantial orders,” says Barrett Joyner, senior vice president of sales and marketing. “Just recently, two of the analysts groups doubled their expectations on sales of the Tablet PCs, so while it is a niche market now – in the context of the entire PC market – it is a growing niche with a bright future.

“As the song says, ‘The future’s so bright, we gotta wear shades!’ ”

Mi-Co brought together its users for a conference this week, introduced them to a new version of its mobile data capture software, handed out some awards, and talked about the grip it is gaining.

In fact, sales and revenues have hit the point that Joyner says Mi-Co can say “no” to venture capital.

“Mi-Co is driving toward cash flow positive with the funding we have now,” he says, “and based on current sales and the pipeline we should not require additional funding.”

Privately held Mi-Co, which is the brainchild of the father-and-son team of James (chief executive officer) and Gregory (chief technology officer) Clary, won’t disclose revenues. But Joyner does say, “We generated three times the revenue in 2002 as we did in 2001 and we expect to triple again this year – so we really like the trend line!”

Tablet PCs gaining ground

Tablet PC sales hit 72,000 in the fourth quarter of 2002 — just months after being introduced. Some 12 million hand-held devices were sold in 2002, down 9 percent from the previous year, but the growing popularity of WiFi networks could bode well for firms like Mi-Co which are all about wireless data capture.

Mi-Co already has partnerships with companies like Cross (yes, the pen company), IBM, Ericsson, HP, Palm and Microsoft — the big Tablet PC driver. Its new Version 3 works with a wide variety of hand-held devices, Tablets and digital pens, incorporating what James Clary calls “Project Flexibility.”

“Our goal was to increase customer flexibility in implementing applications that require electronic data capture in a mobile environment while they use the most intuitive interface on the planet: pen on paper,” Clary said in a statement.
Joyner says the new version is a big step.

“This is a major benchmark for Mi-Co because it allows us to drive our handwriting –pen on paper paradigm – into a whole new series
of applications,” he explains. “In addition, with the incredibly strong push that Microsoft is making with the Tablet PC there is extensive interest in this platform for mobile data capture – especially in such areas as health care.”

On the war front

Tablet PCs are attracting interest in other areas as well. After all, the latest Gulf War utilized digital communications as ever before in some of the world’s harshest conditions.

“Additionally, with the ruggedized tablets, we are getting extensive interest in mobile military and homeland security applications,” Joyner says.

At the user’s conference, Mi-Co recognized two individuals who are using its technology in very different ways. Donald Smith, a utility technician with the Town of Cary, was named as the “User of the Year”, and Darla Young of the Internal Revenue Service was named “Impact Player of the Year.” Smith was part of a team at Cary that worked with Mi-Co to digitize data about sewer system discharges. Young and the IRS have used Mi-Co for gathering data through its fuel excise tax division.

Mi-Co’s handwriting recognition software claims 98.5 percent accuracy for letters and 99.5 percent for digits. If the IRS finds Mi-Co’s software accurate, who can argue with that?

Rick Smith is managing editor of Local Tech Wire.

Mi-Co: www.mi-corporation.com