Finally, years of hard work by manufacturers and research and development institutions around the world is coming to fruition. Recent announcements made by several proponents of micro fuel cells suggests that the technology is ready for prime time — it isn't just hype. Notebook producers, such as NEC and Toshiba, have displayed prototypes based on the new technology. NEC plans to market a notebook PC with a built-in fuel cell by the end of 2004, with plans to launch a notebook equipped with an internal fuel cell that offers 40 hours of continuous operation by the end of 2005. Japan's Toshiba and Sony are also in the race, working vehemently to produce smaller fuel cells to replace rechargeable batteries in laptops, cell phones and other portable electronic products. Key semiconductor supplier STMicroelectronics also has reported progress on this front, along with many other advocates, such as MTI Micro, Polyfuel, Neah Power, Smart Fuel Cell and Jadoo Power.
These recent announcements fall in line with the projection made by market research firm Allied Business Intelligence (ABI). According to a recent study released by ABI, micro fuel cells will enter the commercial market in the 2004-2005 time frame. Worldwide shipments are projected to reach 200 million units by 2011. Likewise, market research reports from Frost & Sullivan, Darnell Group and Freedonia suggest micro fuel cells have progressed sufficiently to handle several applications in battery-powered portable electronics.
In a study conducted by Frost & Sullivan analysts, applications such as cell phones, notebooks, laptops, camcorders and cordless tools hold great market potential for direct-methanol fuel cells. According to the research firm's projection, these applications are likely to occur by 2005 to 2008. Similarly, data gathered by Darnell Group analysts for the Department of Energy and U.S. Fuel Cell Council indicate that fuel cells will penetrate portable applications by 2005, with the exception of camcorders, which fuel cells are projected to enter by 2006. In terms of numbers, the Darnell report estimates that worldwide fuel cells could account for 8.6 million unit sales for mobile phones in 2004, increasing to 463.8 million in 2009, a CAGR of 122.1% — if the right price points are achieved. Like others, Darnell Group believes the direct-methanol fuel cell holds the most promise. It operates in a relatively low temperature range, making it attractive for tiny to mid-sized applications. However, issues related to cost and transport regulation must be addressed before it enters the mainstream, according to Darnell.
Although micro fuel cells are close to being commercialized, they must overcome certain barriers before they become a tangible threat to rechargeable batteries. Technology research firm ABI advises that several issues need to be resolved first before widespread use can occur. Technical issues include water management, volumetric energy density and packaging. In addition, they must handle extreme temperatures before they can see volume production. Likewise, Darnell analysts have identified several factors driving adaption of this new technology. High-value applications, new features of devices, less price-sensitive markets and the ability to bring costs down will all play a part in whether this technology will be successful. At the same time, competing technologies, overcoming technical hurdles in the development of fuel cells, regulatory requirements for transport, small markets that wouldn't produce economies of scale, and the business model of Japanese companies — who already have a foothold in the market — could pose threats sufficient enough to delay entries into this market, cautions Darnell. Hence, its impact on the portable market will not be felt before the end of this decade.