Burgeoning concern about security is boosting the market for a couple of U.S. companies that market GPS-equipped devices designed to track the movement of individuals. The target consumers for their services are parents of small children and people who are taking care of elderly relatives.

Wherify Wireless Inc., based in Redwood Shores, Calif., introduced its $400 wristwatch-style personal GPS locator in July 2002. The company began development of the locator in 1998, but increased fears about terrorism and the safety of children are spurring new interest in the product, said Wherify spokesman Bob Stern.

Digital Angel, located in South St. Paul, Minn., markets a $300 pager-style unit -- which debuted in mid-2002 -- for use mainly with senior citizens, said Randy Geissler, the company’s chief executive officer.

Both locators combine digital wireless technology with signals from the Global Positioning System (GPS), a 24-satellite constellation that provides position-location, velocity and time information to receivers anywhere on the globe. The wearable units transmit a signal that another person can track via the Internet. The location of the wearer is displayed on a password-protected World Wide Web site that combines the location information with satellite and aerial imagery.

Wherify’s device also includes an emergency 911 system that can be activated by the person wearing the device, while Digital Angel’s unit can alert monitors when the wearer leaves a pre-set geographical boundary. While using GPS to monitor the movement of individuals is a fairly new commercial application, industry analysts consider it a subset of the growing asset tracking and fleet management market.

“There are all kinds of little niche applications sprouting up around GPS technology -- mated to other technologies such as two-way communications and the Internet,” said Ron Stearns, a consulting analyst with the aerospace and defense group at Frost & Sullivan of Mountain View, Calif.

“I haven’t seen any evidence that this particular niche is growing by leaps and bounds, but that’s not to say this cannot be a profitable business for certain companies,” Stearns said.

North American sales of GPS products in 2003 are predicted to be around $4.7 billion, with asset tracking and fleet management accounting for $670 million of that total, Stearns said. The only commercial market for navigation and position-location services with greater sales is vehicle navigation, he said.

Ken Smiley, a director for Forrestor Research Inc. a Cambridge, Mass.-based firm, said it is too early to speculate about the potential size of the market for tracking individuals. “This is another use for GPS technology that is very much in its infancy stage,” but there are multiple uses for the technology that could lead to growth in the sector, he said.

Wherify is a privately held company that does not report its revenues, but sales of its locator unit are “in the thousands,” since its introduction, Stern said.

Sales of Digital Angel’s products accounted for about $2.5 million of the company’s $33 million in 2002 revenues, Geissler said. Both companies charge monthly service fees for their tracking services, which range from $20 to $50. “We’re not out to make large profits on the units,” Geissler said. “We want to operate on the cell phone model and make our profits from the monthly monitoring service. That’s where the long-term value is.”

The two companies also are taking different marketing approaches. Digital Angel sells its units mainly to distributors who then make the sales within the target markets. Wherify’s unit is available in consumer electronic stores, and the company recently demonstrated its locator to a group of parents and students from a private school in California.

Adult chaperones with Christ Lutheran School in Rancho Palos Verdes, Calif., carried one of the devices during a trip the school’s eighth-graders took to Washington in May, Stern said.

Jim Neumann, the school’s principal, said the use of the locator alleviated some of the safety concerns of some parents who had children on the trip, and the school is considering buying a unit to use on future trips.

“This was a way to get a feel on how it would work and put parents’ minds at ease,” Neumann said. “This was my introduction to the technology, and it was exciting to see the possibilities.”

While the market for the first generation of locators is just taking off, both Wherify and Digital Angel already are developing next generation units.

Wherify is working on shrinking the size of its units to the size of pen and marketing it to executives and parents of teenagers, Stern said. The company also hopes to expand into the commercial fleet monitoring business and developing chips that can be placed into items such as laptop computers, he said.

Digital Angel already has developed a prototype of an implantable microchip-sized unit for humans, but “I don’t see that becoming a business until some time way out in the future,” Geissler said.