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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: FMK who wrote (3040)	5/26/1998 7:54:00 PM
From: kolo55	Read Replies (2) \| Respond to of 27311

Look at worldwide microprocessor(MPU) demand. In 97 there were about 80 million MPUs produced in the world. About 15-20% go into servers, and laptops get about 15% of the remaining market, the rest go to desktop units and workstations. This works out to a world-wide market of about 10 million new laptops per year. I suspect the replacement market, which includes the purchase of spare additional batteries, should be as big or even bigger than the number of units purchased directly by the OEMs for sale with their new units. But it will take some time, 4-5 years at least, for the outstanding inventory of laptops to turn over and be replaced by Li-poly machines. From what I have heard, its unlikely that Li-poly will be used in existing laptops, since the charging system has to be designed specifially for a Li-poly battery. If this isn't so, please correct me. Given this, I can't believe the info on the LITH study is consistent with new OEM market demand, and the capacity numbers contained in your post. Something's not correct. As for pricing, the $40 per batttery is from your post, and given that Valence provides cells, seemed reasonable. I'm guessing the retail cost of the finished packaged battery would be in excess of $100. If the cells cost about $112, the final retail cost of the finished packaged battery would be in excess of $200 or more. At what point will sales price resistance hit? But if Valence does get $100 per battery, then the initial revenue ramp would be much faster than I indicated in my post. I don't know the answers to these questions, but this is important to gauge final market demand. Thanks for the reply, and I'll do some more research. Paul