News: Analysis & Commentary: COMMENTARY
Plastic power is on the way, and the U.S. leads the charge
Last September, at the World PC Expo in Tokyo, Japan's digerati got a glimpse of the world's thinnest notebook computer. Built by Mitsubishi Electric Corp., the Pedion measures just over half an inch thick and weighs only 3.1 pounds. The secret: a revolutionary new type of lithium battery made from flexible sheets of plastic. But the biggest surprise was the battery's pedigree. It didn't come from Sony, Sanyo, or Toshiba, whose batteries power most of the world's portable computers. It was made by a Newark (N.Y.)-based startup called Ultralife Batteries Inc.
Ultralife is part of a new gang of U.S. battery makers that see their future in plastic. And all of them are targeting the booming market for portable electronics gear. In 1997, manufacturers around the world shipped some 14.7 million mobile computers, along with nearly 90 million cell phones, according to Dataquest. By 2001, yearly notebook sales could reach almost 30 million units, and phone sales could exceed 210 million. Users will expect improved performance, says Dataquest analyst Mike McGuire. "Everyone is interested in seeing new battery technology."
All the U.S. developers of plastic lithium batteries have licensed key technology from Bellcore, the former research arm of the Baby Bells, which unveiled the world's first workable designs back in 1993. Instead of compressing liquid chemicals in a metal tube, Bellcore scientists encapsulated them in plastic. So the batteries are safe and can be folded to fit any product shape. "That affords design freedom that no other battery provides," says Andrew J. Zaremba, product line manager at Hewlett-Packard Co.'s mobile- computing division. And now that the technology is widely dispersed, "we will finally start to see a lot more product in the market," says Christina Lampe-Onnerud, Bellcore's senior scientist in charge of battery development.
AUTOMATION SNAG. Once a few kinks are ironed out, that is. As Hewlett-Packard learned firsthand, plastic lithium batteries are easier to admire than to build. With help from Mitsubishi, HP on Mar. 18 unveiled a U.S. version of the Pedion, called OmniBook Sojourn. But Ultralife, which had been hired to make plastic batteries for HP, hit a snag automating its production line. So instead, the Sojourn runs on a new lithium-ion design. These batteries are light and thin, but designers say they still would like plastic.
Ultralife isn't the only one to suffer production glitches. Over the past nine years, Valence Technology Inc. of Henderson, Nev., has invested $150 million in developing plastic lithium batteries. But the company has been slow to get products out the door and doesn't expect volume shipments until the fall.
In the face of such delays, some large potential customers, including Compaq Computer Corp., remain skeptical about plastic batteries. Other than flexibility in design, says Ted H. Clark, Compaq's marketing vice-president in the portable-PC division, plastic "has few advantages over lithium-ion today." Shares of both Ultralife and Valence are trading far below their 52-week highs.
Another concern is mounting competition from Asia. The Japanese currently own the lithium-ion market and are feverishly pursuing plastic technology--from both Bellcore and domestic companies. Toshiba, Sony, and Matsushita could all, at some point, be major players. A Bellcore licensee in Malaysia called Shubila Battery is also ramping up production. But whether the game remains in the U.S. or moves to Asia, plastic batteries are on track to just keep going and going and going.By Neil Gross in New York, with Irene Kunii in Tokyo and Nathan Estep in Fort Lauderdale, Fla.