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Thinking sideways seems to be one of Carl Freer's specialties. The 35-year-old entrepreneur originally set out to develop a small device that parents could use to keep track of their children. After some initial testing, he and his business partners junked the idea. "We decided no kid in his right mind would want to be tracked or traced," he says. But Freer quickly came up with another way to use Global Positioning System (GPS) technology: to target ads to users on the move.
This thinking eventually led Freer and his colleagues to the Gizmondo, a handheld "multifunctional entertainment device," already on sale in Europe and due to hit the U.S. market later this summer. Freer's audacious plan is to pit Gizmondo against the handheld gaming devices of heavyweights Sony and Nintendo. Despite the competition, Freer aims to sell 3 million of his novelty-packed consoles worldwide by the end of the year.
Developed at a cost of $100 million, the Gizmondo offers much more than the standard gaming console for 15- to 35-year-olds, his target market. It's a "lifestyle product." Ever wanted a single handheld machine that could show DVD-quality films, play music, take pictures, send and receive e-mail and locate your position on a map? Oh--and also play games? The Gizmondo sales slogan: "I can do anything."
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It's going to have to do an awful lot to beat the competition. The Gizmondo's launch more or less coincides with the appearance of Nintendo's DS and Sony's PSP. Neither includes GPS technology, but they both boast a classy back catalog of games and sell for considerably less than the $399 price tag of the Gizmondo. "It's a complete David and Goliath situation," admits Freer. "But I have a very sharp stone."
Will it sell at that scary price? It won't have to, says Freer. Buyers ready to receive the occasional ad--tailored to their particular interests--can have their Gizmondos for a knockdown price of $229. The solution plays neatly to one of the device's strengths. The hungry Gizmondo owner sauntering through Leicester Square won't just receive an ad for his favorite burger joint--its location will appear on his screen.
Freer is a veteran of high-tech start-ups. He's the founder of a Swedish media sales company and a software outfit that pioneered video-compression techniques. (He was named Swedish Entrepreneur of the Year in 1997.) Another Freer company, Tiger Telematics, the parent of Gizmondo, now awaits a full NASDAQ listing this summer with an estimated cap of $1.5 billion.
Freer's confidence rests on the sheer scale of the potential market. About 1.6 billion people now own a mobile phone, and there's plenty of evidence that they'd like to do more with their handheld gizmos. "We are going where no one else has been before," says Freer. "But it's no suicide mission."
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