Staff Reporter

Imagine telling your television set to change channels or turn down the volume.

Imagine commanding your microwave to nuke some popcorn, or your coffeemaker to whip up a fresh pot.

It might sound like some futurist's dream, but it isn't. The technology is here and a Simi Valley company hopes to strike it rich by bringing it to the masses.

Advanced Recognition Technologies Inc. makes voice- and handwriting-recognition programs that can operate on microprocessors found in most consumer electronics.

ART's voice-recognition software has gained increased acceptance by the cellular phone industry with its Smartspeak program, now available in a dozen brands by makers like Samsung, Motorola and Lucky Gold Star. The cell phone market accounts for 80 percent of ART's royalty payments. (ART generates revenues both by selling its software outright and through licensing deals with consumer electronics manufacturers that pay royalty fees based on product sales.)

"Voice activation is becoming a pretty standard feature on (cellular phone) handsets," said Bryan Prohm, an analyst with Dataquest. "This alleviates the real or perceived dangers of using a cell phone in your car."

ART's handwriting-recognition program has gained a foothold in the hand-held computer market, where its Smartwriter program can be found in Windows-based Casio and Phillips personal organizers.

The company recently signed an agreement with chipmaker Zilog Inc. to embed its voice- and handwriting-recognition codes in Zilog microprocessors. That means inexpensive computer chips with built-in voice and handwriting recognition will be making their way into the consumer electronics market by the first of the year, said Richard McCaskill, the company's executive vice president and general manager.

"These chips go into remote controls, TVs, microwave ovens, you name it," he said.

The company, which conducts its research and development in Tel Aviv and the bulk of its sales and marketing in Simi Valley, expects revenue to more than double to $10 million this year. Last year, revenues were $4.3 million.

Deloitte & Touche LLP recently ranked ART as the seventh fastest-growing company in greater Los Angeles. Last year the company was named software developer of the year by the Southern California Software Council.

(The company located its headquarters in the United States for the purpose of going public at some point, said McCaskill. He noted that many other Israeli firms have done the same.)

ART's voice- and handwriting-recognition programs grew out of intelligence work that the company's president and co-founder, Gabi Ilan, did for the Israeli government.

Ilan, who is still a major in the Israeli Army reserves, discovered mathematical equations or algorithms that can be used to identify patterns in speech or handwriting. That information can then be developed into programs that enable computers to recognize the written or spoken word.

While other voice-recognition programs (like those developed by IBM Corp.) memorize whole phrases and require up to 40 million bytes of storage space, ART's codes recognize single words, requiring only 20,000 bytes of memory.

"One of the advantages is that we have a very small footprint for our software," said Dr. Meir Burstin, the company's chairman and chief executive, in a telephone interview from Tel Aviv. "Until now, one needed high-end processors for voice recognition. Now you can implement it in a toaster or TV set."

The company, which closely guards its codes, holds six patents on the technology, with more pending.

Burstin credits Israeli technical savvy and American sales and marketing know-how for the company's success. About two-thirds of the company's employees are based in Tel Aviv, while its sales and marketing office, headed McCaskill, is in Simi Valley.

To attract talented people, ART has developed a close relationship with Tel Aviv University. "We have a lot of students here, and we encourage our employees to go for second and third degrees while working here," said Burstin, himself a professor at the university.

ART was founded in 1990, but it wasn't until 1997 that Samsung and Lucky Gold Star included the company's software in a low-cost phone, said McCaskill. It enabled users to "phone home" or "call office" merely by speaking the words, rather than dialing.

Samsung, which sells voice-activated phones directly and through Sprint Corp.'s Sprint PCS service, was so impressed by the consumers' response, it has since incorporated the technology into its entire product line.

McCaskill said the company plans to continue its push into the cellular phone and hand-held computer market, while also working to make its software a standard in the automotive industry, which is under pressure to simplify increasingly cluttered dashboards.

This month in Frankfurt, Germany, Siemens Automotive is demonstrating a concept car that features voice and handwriting recognition using ART's technology. Drivers will be able to control the radio, CD player, navigation system and other components through voice commands or by tracing a finger on a touch pad on the steering column.

Bruce Crocker, managing director at Hambrecht & Quist LLC, said ART's biggest challenge will be to sell its software to large manufacturers that are attempting to produce voice- and handwriting-recognition programs in-house.

(Hambrecht & Quist bought a 25 percent stake in ART in the early '90s for $3 million. About 17 percent of the stock is held by company founders and managers, and the rest by smaller stakeholders, including Nomura International PLC.)

"(ART's software) doesn't take a super computer to do the recognition aspect," said Crocker. "It's compact and efficient."

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