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A year ago, Jeff Gibbons was playing with a Furby - the furry little computerized toy - when he had an idea. What if he could reprogram it to speak normal English, instead of its usual gibberish and cooing? "You could put them in a gift box and have it yell 'Let me outta here!' " laughs Gibbons, a computer consultant in Calgary.

Furry Computerized Toy
Cool idea - and, as it turns out, one that a lot of other hackers already had. When Gibbons went on-line, he discovered a whole network of Furby geeks. Some had set up a "Hack Furby" contest, and one techie had ripped the toy apart, posting a complete spec of its internal systems - the microswitches, tilt sensor, motor control, audio control. "That was half my work done there," Gibbons marvels.

But it was Gibbons who finished the job - by figuring out out how to add a new microchip "brain." He released his solution on the web, and last November became minorly famous for winning the "Hack Furby" contest. Soon, geeks worldwide were reprogramming Furbies to use as intruder alerts, motion sensors, or to tell filthy jokes. "I'm getting e-mails every day about it," Gibbons says.

In some ways, this is a familiar story: hackers working on-line on collaborative projects. That's what the open-source software movement is all about. To create the Linux operating system, for example, Finnish programmer Linus Torvalds worked with hundreds of other hackers worldwide. As the open-source movement has realized, many hands make light work. If enough people take a crack at the same problem, they can figure out a solution for any software puzzle.

But in the last year, I've increasingly seen a similar thing happen with hardware. Geeks are taking high-tech devices - scanner pens, web pads, digital recorders - then dissecting them together on-line and finding new uses for them. Call it, if you will, open-source hardware. It has the potential to subtly alter the way businesses develop their gadgets.

After all, what these guys are doing is essentially free technical research. By November, 2000, Furby's mass popularity was pretty much dead, but the hackers have figured out new ways to harness the toy's rather astonishing computer power. Indeed, this is part of what fuels the trend: Cheap electronic devices are being built with ever more powerful processors, allowing toys and gadgets to be used for things the inventor never dreamed of. And since they're mass-produced, they get into the hands of enough hackers to produce a vibrant community. "We're doing lab research for these guys," says Peter van der Linden, an engineer in Silicon Valley who founded the "Hack Furby" contest. He's programming his own Furby to calculate and read out the digits of pi. "We're giving these products new life!"

The same thing happened to the CueCat, a small, cat-shaped scanner pen handed out for free last year by Dallas, Tex.-based Digital Convergence. Plugged into your computer, the CueCat was intended to work as a device for browsing content on the internet. You could scan special bar codes in advertisements, and the CueCat would direct your browser to sites with more information.

Within days, hardware hackers broke the CueCat's encryption codes - and started rejigging the device. Michael Rothwell, who works in high-tech development in North Carolina, wrote software that lets you use a CueCat to swipe the bar code on a book, and be taken to its relevant page at Amazon.com. He's also trying to use it to build an inventory of his CDs. "This thing has all sorts of potential beyond what Digital Convergence was using it for," he notes. "Even better, really. I mean, the idea of using it as a way to browse the net was always kind of stupid. This is much better."

Mind you, this isn't quite so simple for hardware developers. Hacking devices requires that geeks publicly discuss the intricacies of proprietary technologies - stuff that companies are trying to keep hidden, or at least under control. But, as with the open-source software movement, the techies are primarily interested in learning and having fun - and don't always respect traditional notions of intellectual property.

After the CueCat was hacked, Digital Convergence sent out warning letters to Rothwell noting that he was using proprietary code. "The thing about intellectual property is that you have to defend it right away," says Doug Davis, the chief technology officer for Digital Convergence. Think of the law this way: If you're lenient with the first nine people who use your proprietary technology, then it gets harder - or impossible to prosecute the tenth.

For some companies, hardware hacking has helped trash their business plans. In December, 1999, the Austin, Tex.-based Netpliance put out the i-opener, a device for letting newbies surf the net. It included a flat-panel screen, a full keyboard and 32 megs of memory, and cost only $199 (U.S.). Since it had no hard drive, you couldn't download big documents or install new pieces of software.

Until the hardware hackers got ahold of it - like Ken Segler, who runs his own electronics consulting firm in Las Vegas. Segler bought one, wired in an external hard drive for another $100 (U.S.), installed Linux, and presto - he'd turned the i-opener into a full-fledged computer, for under $200 (U.S.). "Not bad," he muses. Other techies flooded Segler's web site looking for a guide to the hack. He eventually sold "a few thousand" special kits to help people modify their i-openers.

The hack was ruinous for Netpliance. For the company to make money, it needed people to sign up for Netpliance's $21.95-a-month (U.S.) internet access plan, geared for net newcomers. The devices weren't moneymakers - they were priced at cost to help seed the market. So every time a hacker bought one, turned it into a computer and didn't sign up for the company's service, Netpliance lost money. "We were subsidizing the whole thing," complains Jon Werner, Netpliance's director of emerging technologies. Unable to fully halt the trend, Netpliance stopped making i-openers in mid-January. Now it focuses solely on providing on-line services.

Still, things aren't always combative. Tiger Electronics hasn't tried to shut down any Furby hacking, since it already makes money on each one sold - even if somebody opens it up and teaches it to recite dirty limericks. ("But," a Tiger PR rep tells me sternly, "we do not approve of anyone altering the magic that is Furby.")

And Digital Convergence openly acknowledges that the hackers were providing an quixotically valuable service, by finding potential new markets for their CueCat. In fact, the company quickly decided to let hackers cheaply license the technology so they could legally create personal applications for the device. "We fully expected that people would find new uses for it. We knew it was going to get hacked," Davis says. He was also amazed at the expansive technical write-ups of the device he found on-line: "Some of it was better than ours. I was telling our technical guys, 'Hey, you gotta see this stuff.' "

Text from Clive Thompson