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Batteries Business Page 01 Copyright 1996-2003 by Batteries Digest
 

  Killer Aps Are Still There If You Want Them

Hello Subscribers,

Before moving to the main subject, I have to take a moment to tell you a story. The other day I was hanging out at my favorite watering hole, the Pink Palace, with my buddy the bartender, Butch, who is a bulldog by birth. This penguin comes in, pulls up a barstool and Butch, wiping the bar, says his usual, What will you have? The penguin asks, Was my father in earlier today? to which Butch answers, Dunno, what does he look like?

Where was I? Oh yes, killer Aps! Every strategic planner and marketing manager is looking for the holy grail for his/her product which will sell billions each year, with a fantastic margin. Cell phones are no exception. Now marketeers are chasing 2.5 and 3G but the customers arent playing along. Worldcom accounting mentality has pounded telecom profits into pits so deep they dont even include fire. While gross corporate accounting schemes abound, other legal schemes include obsolescence which is tailored to increase sales at the expense of frustrated customers.

Based on a personal experience, there appears to be a contrary untapped killer ap in cellphones. Here is the background: Three weeks ago, Shirleys Sprint Touchpoint battery crashed. She has a service contract on it from the retailer which discontinued supplying the battery, apparently because it is in their most profitable interest to have the customer buy a new phone with an updated and more costly monthly contract. After taking it to the store, she found out that, although it was only two years after selling her the product, Best Buy was not going to get any, and the customer sales representativeoffered no recommendations to implement repair under the service contract. After holding their feet to the fire, the retailer has agreed to pay for the battery if Shirley can buy one somewhere else. When checking with battery vendors such as Radio Shack, Batteries Plus and 1-800-Batteries, each stated that their company had never carried a replacement or had discontinued the battery.

According to sales people at popular cellular retailers, all cellular manufacturers want to quickly obsolete todays phone and push the customer into a new phone and service contract. Key to the issue is a non-standard battery. Every cellular manufacturer drives manufacturing costs up by specifying a one-of-a kind battery, then shuts off the supply when the market year expires. Although the electronics continue to function, the limited battery life guarantees a re-supply of customers seen by the marketeers as herds of not-very-bright sheep.

Now, the killer-ap! Suppose that one renegade manufacturer sold a cellphone which included an off-the-shelf, standard battery, maybe even AAA Nickel-metal hydrides. Maybe the talk time is cut in half, but with three extra sets of batteries in my briefcase, I would have twice the total talk time of todays Lithium-ion at a fraction of the price. I could easily get more. Perhaps this renegade would put a battery gas gauge in the cellphone so I would know when to swap cells. Will I pay a premium for this product? You bet! It will mean having a working cellphone while the other glitzy followers are waiting for their obsolete phone to get replaced. I shall have to find out that this product exists, so if you make one, get this product differentiating message to me.

Some digital cameras already have this off-the-shelf replaceable battery product differentiation, but I was too slow to recognize it when I bought mine. However, I will be smart enough to make it the last time since the choice is offered. >Keep chugging!>

Trends(09-02BD78-09-10)

BattCellular(09-02BD78-7-8)

 Rayovac Varta(09-02BD78-2-3)

DaimlerChrysler was named Environmentalist of the Year. The award was given by the Environmental Research and Education Foundation (EREF) for DaimlerChryslers new recycling technology that could significantly reduce the amount of old car parts going to landfills. (08-02BD77-9)

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The New Normal

In its midyear roundtable of financial experts, Abby Joseph Cohen said, There are still a handful of unpleasant surprises coming, mainly form the telecom area.Since this statement was made many days before the announcement of the Worldcom fraud announcement, BD wonders if inside information may have kept some from investing in WCOM.(07-02BD76-13)

BARRONS
June 24, 2002

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German battery maker seeks partnerships

Varta AG is seeking partners for its automotive and portable divisions. The move is necessitated by the growing purchasing power of large retail chains and intended to strengthen its business in Asia and the U.S. Automotive and portable batteries are the largest of Varta businesses which altogether produced $26 million in profit from sales of $590 million in 2001. Exide is not considered a contender since they are reorganizing under Chapter 11 bankruptcy in the U.S. and their participation would be further complicated by European antitrust limits. Varta is 92% owned by DB Investor , a subsidiary of Deutsche Bank. (07-02BD76-12)

Automotive News
May 6, 2002

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East Penn named Glenn V. Perrini as Vice President of Sales, Automotive Batteries and Director of Sales, Cables and Diversified Product.

Microporous Products, L.P. welcomes Matthew Wilhjelm to their marketing team.

Midtronics appoints Ron Oritz to Vice President and General Manager. (07-02BD76-3)

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GP Batteries reports year end results of March 31, 2002. During the year, GP Batteries over all performance was affected by the sluggish demand for electronic products worldwide in the second half of the year. Compared to the previous year, its turnover and profit decreased by 6.8% and 30.2%, respectively. Alkaline 9-Volt batteries recorded a healthy growth of 24% due to strong demand from private-label customers. GP Batteries is cautiously optimistic about its business outlook as there are signs of economic recovery, especially in the OEM market. Demand for Lithium-ion and Nickel-metal hydride is expected to grow. The company will continue to capitalize on the strong growth from private-label customers and develop the China market. They will explore opportunities in electric vehicles, especially for application of their Thin Metal Film (TMF) Lead-acid batteries. (07-02BD76-3)

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Arthur D. Little accepts offers for sale of its seven lines of businesses. Five buyers from around the world are in the process of purchasing these businesses for a total of more than $96 million. On April 8th, the sale was approved in federal bankruptcy court in Worchester, Massachusetts; the sale reflected the auction conducted on April 3rd and 4th as part of the Companys sale under chapter 11 of the U.S. Bankruptcy Code. Arthur D. Little, a 116 year old company was a spin-off of the Massachusetts Institute of Technology.(06-02BD75-7)

 The market for portable power supplies in the US is projected to increase 7.2 percent per year through 2005 to $10.7 billion. Among the major established products, secondary batteries hold the best prospects going forward, given their leadership position in growth markets such as high-end IT devices. Demand for primary batteries, exposed to more mature product markets and less potential for technological upgrade, will grow at a below-average pace. Portable and micro fuel cells are expected to be sold in commercially significant volumes by mid-decade. On the downside, portable power supply markets will be adversely impacted by slower economic growth than prevailed during the latter 1990s. (Data is from Portable Power Supplies by The Freedonia Group, Inc., Tel: 440-684-9600.) +

In other news, former president and chief executive Arthur Hawkins and two other former executives of Exide, Alan Gauthier and Douglas Pearson, are on trial in East St. Louis. They are accused of lying to secure a large contract with Sears, Roebuck and Company in 1994. They are being accused of knowing that substandard batteries were manufactured, chose to conceal the defects and bribed a Sears employee to continue pushing the defective batteries. The trial in East St. Louis, Illinois is expected to last three or four months. If convicted, they could possibly face a prison sentence from five to ten years.(05-02 BD74-8)

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Exide Technologies applies for Chapter 11 bankruptcy protection in mid-April. The company has arranged for $415 million in new financing, including $250 million in debtor-in-possession financing from Citicorp USA Inc. and other banks. It also included $165 million in financing provided by Citibank N.A. and other banks for its units outside the U.S. which are not included in the bankruptcy filing. The company said that it elected to file for reorganization because it offered the most efficient way to restructure its balance sheet and access new working capital while continuing to operate in the ordinary course of business. Exides bankruptcy filing listed assets of $2.07 billion and total debts of $2.52 as of December 31, 2001. Exide has a potential bidder for buyout. The Triton Partners of New York, a private equity firm, is considering a bid for the company. Experts say any takeover would likely require a major debt restructuring under bankruptcy court supervision. Exide bondholders struggle amid buyout interest by Dane Hamilton, Reuters, 04/02/02 (05-02 BD74-8)

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AER Energy Resources, Inc. announces a new President, Dr. Lawrence A. Tinker. David Dorheim has resigned as President and CEO but will remain a director and a part-time consultant.

Texaco Ovonic Battery Systems LLC names Thomas S. Neslage as President and Chief Operating officer. James K. Greiwe was named Vice President, Product Development. (05-02 BD74-6)

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As Technology Advances, Batteries Dont


Taking a number of loose quotes from less than astute thinkers of our times, this story would have the average citizen believe that most all, if not all, problems can be blamed on the inability of batteries to keep up with technological innovation. For example the director of the Institute for the Future, Paul Saffo states, Theyre holding us back big time. Had batteries advanced at the pace of the computer processor, a double-A cell would contain more energy that a tactical nuke.

Even a supposedly credible member of the MIT faculty, a Professor Donald Sadoway adds, Within a handful of years, batteries will be powerful and cheap enough to propel a car 250 miles without a recharge. When this happens, automakers will junk the internal combustion engine.

(BD Ed. note: While most - who have at least a conversational understanding of the second law of thermodynamics and current business forces - would not accept these statements, the average person on the street is left to wonder if he/she was not being led astray by the current battery offerings as presented by less than responsible journalism. Thinking of this type got Californias government into the mess it cant get out of with ZEVs, which also diverted funds to stifle true ecological advancement for the past decade. This battery story exemplifies a real need for accurate and responsible battery, fuel cell and photovoltaic people to get realistic information to voters and taxpayers.) (04-02 BD73-12)


by the Associated Press
carried in The Desert Sun
March 3, 2002, p.D1

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C&D Technologies reports earnings of $.16/share for fourth quarter ending January 31st. Last year, January 31, 2001, 4th quarter earnings were $.61/share. The Dynasty segment had a sales decline of 47 percent, when compared to the prior years 4th quarter, primarily due to a decrease in battery demand for uninterruptible power supplies as well as telecommunications applications. In the Powercom group, sales fell 40 percent in the same time period. The Company reported that the telecommunications market demand for reserve power systems and batteries remain weak. In Motive Power, sales dropped 31 percent when compared to the prior years 4th quarter. (04-02 BD73-6)

ZAP, maker of electric bicycles and other electric scooters, files for Chapter 11 bankruptcy protection. The Company says they will continue to fill current orders and honor warranties during bankruptcy restructuring. ZAP stated that they filed for protection because of falling orders and high costs of protecting their patents.(04-02 BD73-5)

Exide Technologies stock has been de-listed from the New York Stock Exchange as of February 14th, 2002. The Company is listed on the OTC Bulletin Board under the symbol EXDT.(03-02 BD72-9)

Eagle-Picher Technologies is sued by former employee. The former employee, Rick Peoples, alleges the company manufactured batteries for the U.S. military that did not meet specifications of the contract. The Boeing Co. utilized the batteries as power for the Joint Direct Attack Munition Project; Boeing has stated that they have not had any problems with the subject batteries. Eagle-Picher issued a statement: Eagle-Picher Technologies stands firmly behind the quality and reliability of its batteries used in various weapons systems... The U.S. Air Force is sending a review team to check into the allegations.(Feb. 02,BD71-6)

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End-users move forward with network deployments despite economic climate. Two new studies released by Infonetics Research today show planned network growth across the U.S., Canada, and Western Europe. The research confirms that VPNs and security remain in high demand; deployments of wireless LANs are rapidly ramping, and managed service demand is strong.

Although the troubled global economy and world events in the past year have heavily impacted the networking market, most end-users have adjusted and are moving forward to expand the speed and functionality of their data networks.

End-users understand that the economy is delicate and unstable now, and many have tightened their belts a bit, said Jeff Wilson, executive director of Infonetics Research. They are much more selective about the new technologies, products, and services that claim to have all the answers. Theyre still interested in new technologies, but they are primarily looking at technologies that allow them to reduce capital and operational expenditures.

The studies, Network Technology Adoption Forecasts, US/Canada 2002 and Network Technology Adoption Forecasts, Europe 2002, provide analysis of current and future adoption of core networking technologies, and present a clear picture of how far networking and Internet products and services have penetrated.

Sample data from the studies:

Strong growth is expected for managed security services in the US and Canada:

¨ Small organizations: 28% used managed security in 2001, jumping to 70% in 2006
¨Medium organizations: 20% used managed security in 2001, 45% in 2006
¨Large organizations: 19% used managed security in 2001, 41% in 2006

Upsurge in wireless LAN use in Europe:

¨In Benelux: 9% used wireless LANs in 2001, leaping to 23% in 2006
¨In France: 8% used wireless LANs in 2001, 25% by 2006
¨In Germany: 11% used wireless LANs in 2001, 36% by 2006
¨In Scandinavia: 16% used wireless LANs in 2001, 46% by 2006
¨In the UK: 12% used wireless LANs in 2001, 43% by 2006. (Thanks for the lead, George.)(Feb. 02,BD71-6)

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EnerSys Inc. reaches agreement with Energy Storage products group of Invensys plc. of England. The closing of the transaction is expected in the first quarter of 2002. John D. Craig, Chairman, President and CEO of EnerSys states, ...The combining of the U.S.-based EnerSys and the European based Energy Storage products group will result in the worlds largest industrial battery company.

 

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Exide Technologies secures another waiver from its senior lenders through April 12, 2002. The Company was not in compliance with certain covenants contained in its Credit Facility as of September 30, 2001, and secured a waiver through December 28, 2001. Exide has also received notification from the New York Stock Exchange of the possibility that the Companys stock may be de-listed due to the Companys current inability to satisfy NYSE listing standards.

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GP Batteries International Limited acquires Bolder Technologies Corporation, which recently declared bankruptcy in the U.S. GP Batteries paid US$2.5 million for the acquisition. The new TMF (thin metal film) technology will be used by GP Batteries in offering a emergency starter battery for the automobile industry. The technology has numerous possibilities in high-powered applications , in hybrid electric vehicles and for 36-Volt automotive batteries. Asia Pulse Ltd. 2001, 12/21/01

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Johnson Controls reports a slight growth in earnings. The first quarter of fiscal 2002 increased 8% over the prior years $3.4 billion. Automotive European sales increased 23 percent, helped by the purchase of the automotive electronic business of Sagem SA last October. Also, sales of automotive batteries in North America were higher than the prior year, primarily due to shipments to new customers. (02-02,BD71-8)

 

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Qualacomm Inc., creator of the next generation network standard, indicated that vendors have begun shipping cellular phones on 3G network standard in North America. Phones and wireless modems compliant with the 2000 1X standard of the Companys Code Division Multiple Access (CDMA) technology have begun to be shipped from vendors including Kyocera Corp., LG Electronics Inc. and Sierra Wireless Inc.(Feb. 02,BD71-6)

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Sprint and Sanyo Fisher Company provided a preview of their Third-Generation (3G) at the Consumer Electronics Show (CES) in January in Las Vegas; the phone is to be available in 2003. Verizon Wireless is also scheduled to launch their 3G upgrades this year.

The expansion of wireless technology applications is listed as one of the key factors in UPS growth.4 3G should fit into this applications category, but only time will tell how many people will upgrade from their cell phones and pagers. After listening to keynote speakers at Power 2001 report on 3G, a survey of approximately 500 attendees showed that 2/3 of the respondents still thought they preferred using several specialized devices (cell phone, pager, PDA, etc.) rather than one solution. But, the hype is on to produce 3G devices. John Haron, a sales manager in St. Paul, Minnesota for Ultimate Wireless says, The introduction of 3G into the Twin cities will revolutionize the way we communicate, work and share information. (BDs thoughts are that as we continue to have more virtual connectivity, in the process we trade off true interpersonal connectivity- good old fashioned person-to-person information sharing.)(Feb. 02,BD71-6)

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