PluggedIn: Digital Pen Could Replace Keyboards and Mice Reuters ,  April 2, 2002 Laser-based pens have been around in primitive since the 1960s. Expensive, wired styluses have long been available for high-end graphic designers. But OTM's technology promises to offer a low-cost digital writing instrument to the masses. OTM's Virtual Pen, or "VPen," works on a variety of surfaces, from computer screen to paper, and even human skin. It offers freedom of hand motion, unlike a competing digital pen-and-paper combination from Anoto of Sweden which requires a special "electronic paper" to recognize the pen's movements. OTM must overcome a legacy of failure for digital pens. Inventors have had difficulty matching the speed, accuracy and efficiency of a typewriter keyboard. And while consumers may encounter tethered electronic pens at a local bank or in the hands of a package deliverer, such instruments are awkward to use and produce barely legible signatures. Due to the miniature size of its components and the low-power consumption of its tiny optical head, the OTM digital pen can be incorporated into handheld styluses alongside a regular ink-tip pen. But don't expect to find OTM's optical pen on sale as a stand-alone consumer product this Christmas. Chastened by earlier industry failures, OTM has embarked on a patient strategy of winning over the world's biggest mobile phone, handheld and consumer electronics makers first, allowing them to build the digital pen into a wide variety of products. That could create a far more ubiquitous presence for the pens, which could become a standard way for users to input data. "Consumer electronics breakthroughs are not a six-month job," said Lederer, who has globe-hopped for much of the past two years between Europe, North America and Asia from his base in Israel to tie down deals with mass-market potential. FOCUS ON NEW TYPES OF ELECTRONICS While analysts said OTM's digital pen could also serve as a replacement for computer mice or laptop touchpads, the company considers these markets to have matured to the point where they are unlikely to gamble on new methods of data entry. Instead, the sweet spot for digital pens may prove to be an emerging market for smart phones, hybrid devices that are half handheld computer and half mobile phone on steroids. The appeal of such phones, which could sell tens of millions of units over the next several years, is that they give business users access to much of the data now only available on their office desktop computers. Digital pens represent a natural accessory for a smartphone user on the go. "There's no question in my mind that OTM is on fertile ground. This a problem that needs solving if tiny-screened mobile phone devices are going to become the ubiquitous data-handling devices the industry says they will be." OTM's technology can also substitute as a kind of mobile phone joystick for use by game-playing teenagers, officials believe. Last month in Germany, Motorola Inc., the world's No. 2 mobile phone maker, showed its latest line of mobile phones working with a wireless OTM pen, the first writing instrument for cellphones to operate on so-called Bluetooth networks. Microsoft sees OTM's digital pen as a more intuitive way to enter data into handheld computers and mobile phones using its software. At the CeBIT trade show in Germany, Microsoft showed off a Compaq iPAQ handheld linked to an OTM digital pen.