OceanServer finds profits in low-cost unmanned subs

For 3 1/2 years, OceanServer Technology Inc. has been funding the research and development of unmanned miniature submarines by selling its line of lithium-ion packs and battery-management electronics and software, said company President Bob Anderson.
But now, the firm’s unmanned submarines – or “autonomous underwater vehicles” – have started to generate revenue of their own.

In an interview last week, Anderson said his startup, housed in the Advanced Technology and Manufacturing Center, a business incubator in Fall River, has begun to make commercial shipments of its “Iver 2” AUVs to customers.

Competition is stiff in the multibillion-dollar market for such vehicles, which are typically used for offshore surveying and surveillance. But, where most AUVs carry price tags in the six-figure and even seven-figure ranges, Anderson said, OceanServer’s unmanned submarine starts at just $50,000.

Powered by a lithium-ion battery, OceanServer’s 4-foot-long AUV can run for about eight hours on a single charge, at an average speed of 3 knots, and can reach a depth of 200 feet, according to the company.

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Capable of carrying multiple cameras and sensors, the vehicle can be used to inspect underwater equipment, test water quality in reservoirs and even map the ocean floor.
With this variety of capabilities comes a wide range of potential users of the technology, including offshore drilling firms and the military.

Due to the high cost of earlier AUVs, however, “this is … technology that wasn’t available to users such as municipalities,” Anderson said.

OceanServer already has targeted the public sector, providing demonstrations of its Iver 2 for the Massachusetts Water Resources Authority, the state agency in charge of the public water supply for 61 communities in the Boston area.

Industry has been using the technology for about five years, said James H. Miller, a professor of ocean engineering at the University of Rhode Island, who has helped URI students to develop AUVs.

But, he said, the multiple hazards faced by AUVs – particularly in offshore environments – have made industrial users wary of replacement costs.

The vehicles are easily scooped up in fishing nets, lost in stormy seas or damaged in accidental collisions underwater, said Miller. “That’s the key,” he added. “If you make [the vehicles] too expensive, it’s not worth losing it. It’s got to be cheap enough that it’s almost disposable.”

Though OceanServer has come out with a low-cost vehicle, many other companies are also vying for a piece of the growing AUV market.

Bluefin Robotics Corp., founded in 1997 with technology licensed from the Massachusetts Institute of Technology’s Autonomous Underwater Vehicle Laboratory, now offers several classes of AUV. In fact, the U.S. Department of Defense last year gave the Cambridge, Mass.-based firm a $6.6 million contract to develop a craft to perform “clandestine” surveillance and other missions for the Navy.

Pocasset, Mass.-based Hydroid offers AUV systems backed by more than eight years of research and development. The Cape Cod firm has sold more than 75 systems to customers worldwide, according to its Web site.

Gavia AUV of Iceland has been selling vehicles since 2000, at prices ranging from $300,000 to $500,000, company spokesman Arnar Steingrimsson said in an e-mail. The company sees the largest market opportunity in military R&D contracts, he said, “but there is also demand from scientific users and … offshore contractors and surveyors.”

Ron Unterman, a managing partner of the Slater Technology Fund, a state-financed venture capital group in Providence, said “there’s a whole slew of these” companies involved in AUVs. Slater has invested in Portsmouth-based SonicWorks, which is developing a remote-controlled underwater robot to inspect ship hulls, oil platforms and dams.

Yet there still appears to be room in the market for lower-cost products such as OceanServer’s Iver 2. “I think it’s coming down to price,” Unterman said of the AUV market. “Reliability and price are probably the two most important factors.”

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