Thanks for the info on Li-ion market.
>In Q397, there were ~17M Li-ion cells shipped. 42% went to notebooks, 43% to cellular (+ another 5% to PCS/PHS). Only 7% went to the camcorder market. The market for lithium rechargeables last year was driven primarily by the switch from NiMH in the notebook and cell phones.
Lets see, laptops 42% of 17M is 7.3M cells per quarter as of last year; using 3 cells per battery, I get 2.4M batteries per Q. This works out to about 9.6M Li-ion batteries (3 cell equivalent) per year. Since Li-ion was still somewhat less than 50% of the laptop market last year, this implies a total laptop market of about 20-21M batteries per year. This is close to the 22-24M forecast I was making for calendar 1999. These numbers support my earlier forecast and analysis. Does this seem reasonable?
If Valence captures about 12% of the laptop market, this gives 3M per year rate. I still believe they will hit this run rate by the end of next year at the latest. Using $75 a battery for a 3 cell unit (about $25 per cell) gives a $225M revenue run rate just for the laptop batteries.
As Li-poly takes market share, the revenue run rate could easily increase substantially. At 50% market share, the Li-poly market segment could easily be worth $800M annually, say in 4 years. This is even with competition forces driving pricing down to the $1.25 to $1.40 per WH range. What portion of this market will belong to Valence is the question.
Based on my analysis of the market, and supported somewhat by the numbers you quoted, it seems that market penetration rate will be the key factor for estimating the size of this market available to Valence.
Fred has posted some numbers that could support higher prices for the batteries, but I feel uncomfortable with a linear pricing model. A price of $1.65 per WH for a battery in the 45-50 WH range seems reasonable. If the storage capacity increased 50%, the price for the battery should only go up about 25%; if the capacity doubles, the price of the battery would only go up about 50%.
Paul |
