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

To: Javelyn Bjoli who wrote (3433)	7/18/1998 7:39:00 PM
From: steve	Read Replies (1) \| Respond to of 27311

Javelyn and all, How about the battery operated tool industry? A lot of battery operated drills are leaving Home Depot and the like. I imagine/guess there are more battery operated tools in the household than notebooks, cell phones, and camcorders. (at least in the USA) Please be kind, I am definitely out of my element here. Thanks for any answers. steve

To: Javelyn Bjoli who wrote (3433)	7/18/1998 10:26:00 PM
From: John Curtis	Read Replies (1) \| Respond to of 27311

Javelyn: Possible application? How about that burgeoning market sector which should be a whole lot bigger by ~2003, palmtop computing. Hell, for that matter, I see them everywhere more and more these day's, at least here in the Northeast. See this URL: moorshead.com Of course, right now they're powered by double AA's. To the tune of ~35 hours of life, and yes, it'd be hard right now to economically justify replacing them, but with the increasing number of applications being devised to run on them, not to mention chip sophistication, I think they're going to need a stronger power source. By the way, I like that term you used, "digital furnace." Heh! Is that an original from you, or did it come from somewhere else? It's an appropriate metaphor for the electronic home. Another longer term possibility could be a synergistic relationship between fuel cells, solar cells, and a sophisticated battery "sink." I can think of several applications that Lith-poly could be used for, although NiMHd would work just about as well, maybe better since the CEO of Ford is on record as once stating, "You can't break the damn things(NiMHd)." All-n-all, with all the new technology out there on the horizon waiting to come on line I've got a feeling the first decade of the new millenium is going to be VERY exciting, particularly from an alternative energy generation/storage standpoint. Regards! John~

To: Javelyn Bjoli who wrote (3433)	7/19/1998 10:34:00 PM
From: kolo55	Read Replies (1) \| Respond to of 27311

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