Key Tronic Corp. has reached an agreement with IBM that puts the Spokane-based computer keyboard manufacturer in the middle of what may become the hottest product in the notebook computer industry.
Key Tronic is the exclusive manufacturer of keyboards for IBM’s new ThinkPad notebook computers. ThinkPad is the first notebook featuring a collapsible keyboard that folds out into a fullsized typing surface.
In a top-secret project, Key Tronic collaborated with IBM over the past year in development of the keyboard.
“No one else is even close to building something like this,” Glen Griffin, Key Tronic’s vice president of sales and marketing, said Tuesday. “This is the first production model collapsible keyboard in the industry. For all intents and purposes, it will be the benchmark for all others to follow.
“This is another home run for us, just like the Natural Keyboard we make for Microsoft.”
Last year, Key Tronic and computer software giant Microsoft collaborated on an ergonomic keyboard that has turned into a huge seller.
“We knew the Microsoft deal was significant,” Griffin said, “but we didn’t expect it to have an incremental effect on our business. It has though. It has gone way beyond our plan.
“Our expectations for the IBM keyboard have been in our plan all along, though.”
IBM is the largest computer manufacturer in the world. Griffin said the manufacturing agreement with IBM has huge potential for Key Tronic’s bottom line.
“There are predictions from industry analysts who think this notebook is going to be the largest selling notebook of all time,” Griffin said.
Notebook computers - the lightweight machines that pack huge quantities of computing power into tiny packages - have been saddled with miniature keyboards that are difficult to use. Griffin said original equipment manufacturers have been clamoring for years for a keyboard that folds into the tiny notebook package, but opens up to a full-sized typing surface. Getting all that into a package less than two inches thick and smaller than a piece of standard notebook paper has defied technology until now, though.
Griffin said IBM came to Key Tronic because of Key Tronic’s reputation for engineering innovation.
“Other keyboard manufacturers are not innovators,” Griffin said. “They reverse-engineer things. They have just copied what we’ve developed for the past 25 years.”
The IBM ThinkPad computers, which also feature an expandable screen, are 1.7 inches thick, 9.7 inches by 7.9 inches in width and depth, and weigh 4.5 pounds. They were formally introduced in Europe on March 7.
Key Tronic Chief Executive Officer Stan Hiller made reference to the IBM agreement at the company’s annual meeting in October when he said the company would follow up the Microsoft announcement with another major contract with another leading player in the computer industry.
“We can’t say now who it is,” Hiller told the shareholders, “but it’s a major account and we are starting to ramp up for production now.”
Griffin said Tuesday the company presently has still another carefully cloaked deal of similar scope and innovation in the works.
Griffin said the notebook keyboard is being manufactured at Key Tronic headquarters in the Spokane Valley. He said manufacture of the product will remain there.
“Right now, we’ve got several hundred people involved here, running two shifts a day to get as many of these out as we possibly can,” Griffin said. “And IBM is already increasing their orders. It’s just amazing how this thing has taken off in such a short period of time.”
Founded in 1969 by Lewis G. Zirkle Sr., Key Tronic became one of Spokane’s major manufacturing employers before suffering reversals in the late 1980s. Corporate turnaround artist Hiller came on board in 1991, and put the company through a broad reorganization.
The company suffered more losses in 1994 as it absorbed the costs of that reorganization and the acquisition of the keyboard division of Honeywell Inc.
But Hiller told shareholders in October that the company would return to profitability in 1994.