Online Extra: Q&A With Tiger Telematic's Michael Carrender

Why switch from a GPS company to handheld gaming company? Says the CEO: It's clear the growth is going to be astronomical

Michael W. Carrender, CEO of Tiger Telematics in Jacksonville, Fla., was looking at the menacing side of convergence. His company was successful in the field of global-position-system appliances. But increasingly, companies were simply bundling GPS into their own devices. Carrender's Tiger Telematics, proceeded to do some bundling of its own.

This spring it unveiled the Gizmonda. It's a $400 game machine that can handle full-motion video, music, and text and photo messaging. He spoke in May with BusinessWeek's Cliff Edwards. Following are edited excerpts of their conversation:

Q: How can a small company like yours compete with the giants of the industry?


We've got the idea and the technology, but the thing that's more different today than ever before is the strategic marketplace and alliances you can make with other companies around the world. That helps us get to market quickly and efficiently. We use Windows CE for the operating system, Plextech for engineering, a Samsung 400 Mhz processor -- the fastest in a handheld game system. Celestica for manufacturing, someone else for the IC card for the best sound.

That's what made a little company like us be able to do it. Suddenly, we can compete with the Sonys of the world with a best-of-class product.

Q: How do you position yourselves against Sony? Their PSP (the portable entertainment console due out at the end of the year) is getting a lot of buzz.


It's all about positioning yourself in the market. We can say we offer powerful functionality and better quality. And we will get to the market many months ahead of PSP.

Q: What's your idea of success?


Remember, we're a much smaller company, even if we are traded on the Nasdaq. We don't need the number of units somebody like Nokia or Sony sells to be successful.

Q: So how many units would you consider a success?


The Securities & Exchange Commission would be all over me if we gave forecasts like that, but put it this way, when Nokia missed the quarter, they said they were under by 600,000 units. For our shareholders, if we were the company that grabbed those 600,000 units, we would be considered a huge success -- given our size and cost structure, with none of the big overhead like the giants. That said, we expect to sell a lot more than that.

Q: Why is everyone jumping into gaming?


It's clear the growth is going to be astronomical, in terms of its recent growth and future growth. And everyone is thinking the market is going to be so big that there's a place for you in it if you position yourself. You don't have to be No.1 to be successful, or for that matter to be an industry leader in terms of innovation.

Q: But you have a successful GPS business. Why change?


Every company nowadays is looking at markets that may be complementary to their existing business. You've got to find something that has growth, and gaming has huge potential for growth, particularly in handhelds. People want mobility, so you're seeing everyone examining ways of getting into the mobile business.

    Before it's here, it's on the Bloomberg Terminal.