Published April 2003

SonoSite’s small
ultrasound device a big hit

By Eric Fetters
Herald Business Writer

As SonoSite’s products grow smaller, its business gets bigger.

While the 5-year-old company touts its newest hand-held ultrasound device, which weighs in at just 3 pounds, SonoSite Inc. is celebrating its first profit and looking to end 2003 in the black as well.

The Herald/STEPHANIE S. CORDLE SonoSite’s new hand-held ultrasound monitor devices include the iLook 25, which is designed to better visualize veins and arteries, and the iLook 15, which monitors heart motion and basic functions.

The Bothell-based company is both benefiting from and helping to propel greater use of ultrasound technology to quickly diagnose problems inside the body. SonoSite’s sales jumped from less than $46 million in 2001 to more than $73 million last year.

“There’s a big trend toward visual medicine, to be able to see something, rather than just guessing,” said Kevin Goodwin, SonoSite’s chief executive officer.

The iLook is specifically designed for that purpose. Not much larger than a personal digital assistant, SonoSite’s newest models are more than 2 pounds lighter than the flagship 180 product line.

Because the iLook could be used in emergency rooms or doctor’s offices, ease of use was a big consideration in its design, said David Willis, the company’s director of product marketing.

“There are not a bunch of knobs and buttons on this product,” he said.

The iLook also boots up in five seconds and is rugged enough to keep working even after a 3-foot drop onto a concrete floor. Like the 180 line, the all-digital device uses special application-specific integrated circuit chips developed in-house by SonoSite engineers.

In addition to the basic iLook model, SonoSite has a model specifically geared toward a new niche: helping medical technicians accurately insert catheters and other medical devices.

“Missing the first time can be costly, not to mention the patient discomfort,” Willis said.

With its smaller-than-ever size and eye-catching design, the iLook has raised SonoSite’s profile. In December, Popular Science included it in the annual “The Best of What’s New” list, and Medical Imaging magazine’s readers rated SonoSite among the top 10 companies.

The recognition has helped spur interest in the iLook models, which sell between $12,000 and $16,000, since its introduction last summer. Goodwin estimates that sales of the line will make up about 10 percent of SonoSite’s overall sales in 2003.

Five years after its launch as an independent company, SonoSite has sold and shipped more than 10,000 portable ultrasound systems to customers around the world. But the company, which is headquartered in the Canyon Park business campus, still sees plenty of room to grow, Goodwin said.

“I thought of our first profit as a gate. Now we’re moving on to the next one,” he said. “We still have a very big opportunity.”

As doctors and medical workers are finding new ways to use portable ultrasound, they’re buying more of the small machines. The uses aren’t limited to human medicine.

Woodland Park Zoo staff members have used a SonoSite model for reproductive health checkups on its sun bears. The company has promoted portable ultrasound for use in less exotic veterinary medicine as well.

At this time last year, Goodwin and his employees had just gotten a first look, via a television commercial, at a major rival’s new device. During the Winter Olympics telecast, GE’s medical systems division showed off its LOGIQ Book, a portable ultrasound device that looks similar to a bulky laptop computer.

While SonoSite was sure of its technology, the arrival of a new competitor with deep pockets was cause for concern. But Goodwin said he’s breathing easier now.

When the LOGIQ Book was ready for the market late last year, about six months later than previously announced, it weighed in at about 10 pounds. That keeps SonoSite’s advantage in portability and, he argues, technology.

“They have lots of money, we have superior technology,” Goodwin said. “They’ve put ultrasound on a PC platform, while we’ve put it on a few chips.”

As this year progresses, the company hopes to improve its productivity and sales, Goodwin said. After successfully switching from a dealer-oriented to direct-sales approach in the United States and Europe in recent years, the company is making the same change in Japan right now. The company also plans to introduce its next generation of models later this year.

So far, Goodwin isn’t saying much about how they will differ from previous models.

“All I can say is it’s going to be better, better and better,” he said.

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