Sandy Montag doesn't worry now when he takes his young children on a long drive in his SUV. He has a new toy that most parents will understand -- an in-car digital satellite television system.
With hundreds of channels of entertainment, from the Disney Channel to HBO, to keep them occupied, they're silent. "It's like you don't even have them. You can baby-sit and drive at the same time,'' Montag said.
Montag, a New York sports agent, was one of the first customers to get his hands on the TracVision A5, a product designed to bring the clear, digital satellite TV signals into passenger vehicles anywhere in the country, even while they are in motion.
Mobile satellite TV technology has been around for years, but it has been useful only on boats, buses and RVs with enough space to mount a big, bulky satellite dish.
Now, TracVision-maker KVH Industries Inc. of Middletown, R.I., has built a low-profile, saucer-shaped antenna designed to mount unobtrusively to the roof rack of a regular van, sport utility vehicle or car.
The TracVision A5 system, which began shipping in September, will probably appeal for now to the limited audience of tech enthusiasts with the money and interest to buy the latest trendy gadgets. The company makes it clear that the system works best on the open road where there are few obstructions, and not in a major city where buildings can block the satellite signal.
The system, including a rooftop antenna, floor-mounted receiver and remote control, is priced at $3,500. In-car video screens, which can cost $300 to $2,500, and the monthly satellite service fee, are extra.
TracVision supports DirecTV, whose subscriptions range from $34 to $88 per month, depending on the level of service. Add an additional $200 to $400 for professional installation costs, which vary depending upon the complexity of the installation and the hourly labor rate.
For now, KVH is hoping to catch the eye of a growing number of people who are already spending $1,000 or more to outfit their new family vans and SUVs with surround-sound speakers, DVD players, LCD monitors mounted to the roof or inside seat headrests, and wireless headphones.
KVH hopes to sell 12,000 units during the first year. Much further down the road, KVH has set its sights on a broader audience of consumers and hopes to lower the retail price to around $200, said James LeBelle, KVH national sales manager.
"Our goal is the soccer mom,'' LeBelle said during a recent trip to San Francisco to demonstrate the TracVision A5 system in a specially outfitted Lincoln Navigator luxury SUV.
That would reach the growing market of motorists who have gone from drive- in theaters to driving theaters.
The Consumer Electronics Association, the Washington trade group that represents about 1,200 companies involved in the consumer electronics industry,
projects sales of in-car mobile video entertainment and navigation units sold in the United States by the end of 2003 will reach 386,000 units and generate about $542 million in revenue. That's an increase from 316,000 units and $452 million last year.
DVD players go into dashes
The rapid rise of the DVD player, the fastest-selling home consumer electronics device in history, is also fueling the in-car entertainment craze, with the trade group projecting sales of 176,000 in-dash DVD players by the end of 2003, compared with 120,000 last year. The group also estimates about 159,000 flip-down screens will be installed this year.
Operating on the assumption that motorists will be looking for more than just prerecorded DVD movies to display on those video screens, KVH designed the TracVision A5 to plug into existing car video systems.
The publicly traded KVH, founded in 1978, sells mobile satellite communications equipment to the RV and marine markets as well as the military. The company made its first mobile TracVision antenna in 1995.
One of the company's most high-profile customers is one of Montag's clients, John Madden, the famed former Oakland Raiders coach and TV football analyst who travels to assignments on a private bus dubbed the Madden Cruiser.
His vehicle is equipped with a TracVision satellite TV system designed for large vehicles, in addition to three plasma screens and two TiVo digital video recorders.
"What people are getting used to as they sit in the backseat of the SUV is being entertained,'' Madden said in a phone interview.
In the past, mobile satellite TV systems relied on large dishes or domed antennas that protruded 12 to 20 inches high to capture TV signals from satellites orbiting 22,300 miles above the Earth. Those were fine for vehicles such as an RV or the Madden Cruiser.
But the TracVision A5 antenna is contained inside a sleek, dome-shaped case that rises only about 5 inches above a car roof.
Inside are 260 antenna elements that help draw in the signal from the skies. The antenna uses gyros and the Global Positioning System to track its position in relation to the satellites, compensating for the constant motion and sudden turns of the vehicle, LeBelle said.
The digital signal provides a clear, constant picture even when the vehicle is moving, unlike the flickering picture reception so common from standard, over-the-air mobile TV antennas and receivers.
The satellite signal remains strong as long as the antenna is within the line of sight of the orbiting satellites, which are in the southern part of the sky. As with any satellite signal, tall buildings, mountains, trees or even luggage on the roof rack can block that signal and disrupt the video.
Visual proof
During a recent demonstration ride down the Bayshore Freeway in the Lincoln Navigator SUV equipped with TracVision, LeBelle held the steering wheel in his left hand and the TV remote in his right to switch channels from CNN to ESPN to MTV. The picture displayed on the Lincoln's five LCD screens, including a fold-away monitor mounted to the ceiling, remained strong and clear throughout most of the ride.
Predictably, though, the picture froze or went blankfor a second or two whenever the SUV crossed under a freeway overpass, especially in the maze of overpasses leading to and from San Francisco International Airport.
The video feed was disrupted for longer periods as LeBelle drove through San Francisco near Pacific Bell Park and the South of Market area.
"If you're going from New York to Boston, once you get out of the city, you have TV all the way,'' Montag said. "It's awesome. Guys are into the gadget thing. My wife thinks I'm crazy.''
Madden, a Bay Area resident and analyst on ABC-TV's "Monday Night Football,'' said having satellite TV on the go is great because he spends so much time on the road. Madden hates flying and hasn't been on a plane since 1979.
Before getting TracVision, Madden had a mobile satellite TV system that would work only when the bus was stationary on level ground.
It "didn't make a lot of sense,'' because you could do the same thing by going to a hotel or restaurant, said Madden, who has no financial stake or promotional deals with KVH, although KVH did supply the TracVision equipment for the Madden Cruiser for free to promote its products.
Madden stays informed
With the new system, Madden said, he can keep up with sports and news from anywhere without having to stop. "If you want to keep up and watch the news and see what's going on, like the Southern California fires, you can be on the move,'' he said.
The system could be popular for pre-game tailgate parties, he noted. "For people going on picnics or things you can do with your SUV, you just open it up and in addition to whatever else you're doing, you have satellite TV,'' he said.
KVH Industries posted a net loss of $161,161 (1 cent per share) for the third quarter ended Sept. 30, because of delayed military orders and a drop in gross margins.
That compared with earnings of $149,943 (1 cent) a year earlier. However, third-quarter revenue was up 9 percent to $13.5 million, and the company is expecting a small profit in the fourth quarter.
A recent report by San Francisco financial services firm WR Hambrecht & Co. said the TracVision A5 "has the potential to double KVH's revenue over the next two-three years'' because it reaches a much larger audience than the RV and marine markets. Hambrecht analysts also noted that by mid-October, KVH already had a backlog of 1,000 TracVision A5 units, and initial customer feedback was positive.
But Sean Badding, a senior analyst who follows the satellite entertainment industry for the research firm Carmel Group, is skeptical about how large a market there is for in-car satellite TV, especially if the price remains high.
