Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: geep who wrote (4201)	9/14/1998 11:05:00 AM
From: FMK	Read Replies (1) \| Respond to of 27311

Geep- the $25 profit was suggested by another poster for laptop batteries. I commented that I expected profits on laptop batteries to be higher than that. I just spoke with an investor with a financial background who was estimating $40. The specs sheet comparison just posted was for cellphone batteries. I don't know what Valence may have or will negotiate as a sales price, but we have ULBI's pricing as a comparison. Regards, FMK

To: geep who wrote (4201)	9/14/1998 11:08:00 AM
From: kolo55	Read Replies (1) \| Respond to of 27311

Price difference is laptops versus cellphones. ULBI and VLNC have now both released specs on cellphone batteries. ULBI Cellphone batteries hold 3 watt-hours and the manufacturer will receive $12-15 per battery according to ULBI article. Valence cellphone batteries could get a premium pricing above this, since they have significantly more storage capacity at 5 watt-hours. Cellphone batteries are smaller units in both area, volume, weight and storage capability compared to laptops, and will cost much less. The Valence cellphone battery holds 5.3 watt-hours and is 2.5" x 1.4" in area size although at 9mm (about 0.36 inches) it is about twice the thickness of the ULBI unit. So far, only Valence has released specs for a mass produced laptop battery, that I am aware of. The existing specs on the Valence home page from May 98 shows a battery cell 4" x 4" that will hold 11.4 watt-hours. A laptop battery will consist of 3 (or possibly four) of these cells, and so will hold 34 watt-hours, about 7 times the cellphone storage capability. Valence has revealed in their conference calls in May and June, that their current laptop cell exceeds the performance of the unit specified on the Valence home page by at least 20%, but has not released the specs on this unit yet. The new laptop unit should hold at about 45 watt-hours for a three cell unit. This is about 9 times the cellphone storage. Valence also is rumored to be setting up to manufacture a 8" x 10" cell as well which should have even greater storage capability. However the manufacturer will not be able to sell the laptop battery for 7-9 times as much, even if it is 7-9 times the storage. Using a conservative pricing of $1.65 per watt-hour, a 45 watt-hour unit should be priced at around $75. In reality, if Valence successfully manufactures this unit in volume, Valence should be able to get over $2.00 per watt-hour, and be able to sell the laptop battery for close to $100. Final retail pricing for existing Li-ion laptop batteries with similar storage capability is $250-300. For a unit pricing of $75-100 per laptop battery, a profit margin of $25 is not unreasonable for a revolutionary new product. But this profit per battery mis-states and oversimplifies. The first million laptop units annually will likely just cover Valences fixed expenses, and the marginal profit on the next million will begin to flow to the bottom line disproportionately. See this post for my projected income statements for these laptop battery production rates: Message 5709897 Paul