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Our strategy for long-term business success followed a three-step plan. First, demonstrate the commercial productivity that the Segway PT can deliver to large enterprises and government workers such as police, emergency medical technicians, and letter carriers. Second, demonstrate the Segway PT's pedestrian-friendly operation and earn regulatory approval and social acceptance on sidewalks. And third, launch consumer sales, beginning with pilot tests in selected cities. This newsletter highlights the great progress we have made in the eight months since our announcement.

For the past several months we have worked closely with our early commercial customers—GE Plastics, the United States Postal Service, numerous city services, and many others—to run productivity tests, develop new features, and train employees. Segway Inc. has grown its team to support such exciting work, from 76 employees in December to 135 employees today.

We have introduced the Segway PT as a robust productivity tool and proven its value again and again. We have also collaborated with state legislatures to demonstrate Segway PT benefits and establish the Segway PT as a pedestrian-friendly device. Since our launch, 31 states have recognized the advantages that come with Segway transportation and have welcomed Segway PTs onto sidewalks and in public areas.

Our team is looking forward to begin general consumer availability sometime in the next year. In the meantime, we plan to poll and incorporate customer input. Consumer applications using the Segway PT for shopping, commuting, or just getting around town will be a significant piece of the Segway business, and we thank you for your interest, excitement, and patience.

The Industrial Design Society of America awarded Segway the gold medal in the transportation category of the 2002 Industrial Design Excellence Awards, sponsored by Business Week magazine. According to the ISDA's Thomas Gale, "Segway is a remarkable evolution of mechanicals, electronics, and design, forming one of the most innovative new transportation products to come along in many years."

The U.S. Postal Service has partnered with Segway since the early development phases, providing feedback that has enabled us to refine the machine's capabilities. To get a real sense of the product's abilities, the Postal Service has been conducting tests under a wide range of conditions - in strategic places like Tampa, Memphis, Concord, NH and Norman, OK. The latest test site in San Francisco was Segway's most demanding to date, but it turned out that the steep city hills were no match for the Segway PT. The PT's regenerative braking technology came in handy…when letter carriers slowed to a stop or descended hills, energy was transferred to partially recharge the battery. Now that's smart technology!

After a successful trial within National Capital Parks-Central in Washington, D.C., the National Park Service invited Segway to tackle even more challenging terrain—the Grand Canyon. Rangers, interpreters, and supervisors are testing Segway PTs in a variety of capacities on the South Rim of Arizona's Grand Canyon National Park. The Segway PT is proving its versatility, approachability, and environmental value to large audiences as it is used to patrol campgrounds, interact with visitors in a variety of locations, and help personnel move quickly without increasing vehicular traffic.

Segway PTs played a key role as part of the medical and emergency support team for the Boston Marathon in April, and we were delighted when police and emergency service departments asked to use Segway PTs again to help with the city's 4th of July celebrations. Personnel on Segway PTs performed a variety of important medical support and security functions. The Segway PT's raised platform extended the traditional line of sight, and its advanced maneuverability enabled officials to respond to calls and negotiate crowded areas with ease. Cities like Boston, with urban settings and multiple transportation infrastructures, are ideal locations for Segway PT commuters, workers, and shoppers.

Segway recently made two announcements regarding our European presence. The Farnborough International Airshow in Britain was the stage for a groundbreaking partnership with BAE Systems, one of the world's most respected manufacturers of advanced aerospace technology. BAE Systems will become our sales, marketing and distribution partner to the UK defense and aerospace markets.

Nick Foggin, Segway's new Director for Europe, is extremely optimistic about Segway and its many benefits. "The product is nothing short of a revolution," he says. "The Segway PT represents a solution for many significant issues, including pollution, congestion, and urban sprawl—all of which are becoming increasingly acute in Europe. The opportunities are limitless."

Segway focused initially on marketing the Segway PT as a productivity tool to businesses. To date we have proven the value of the machine in a number of demanding environments—customers have logged thousands of hours using their machines to enhance productivity; letter carriers deliver up to 70 lbs. of mail several times a day on various terrain; and meter readers cover typical routes in half the normal time. Consumers will soon realize the benefits of the Segway PT in their own lives. Stay tuned for information regarding our consumer launch.