Fuel Cells Falling Behind Again?

Linnea Brush
Senior Research Analyst

October 23, 2006

I know I‘m going to get flack for this, but fuel cells for portable devices still seem to be following their “getting behind the curve” trajectory. I‘ve discussed this before: someone positions fuel cells for major adoption, usually within a year. Prototypes are announced, some products come out, but commercial traction remains elusive. The media buzz continues, however, and the following year the same pattern is repeated.

 

If you read between the lines of hype, some progress has been made – sort of. I first wrote about micro fuel cells back in 1999: “In January, 1999, Manhattan Scientifics announced that a cellular phone had run continuously in standby mode for 24 hours, powered by an alcohol-fueled pre-prototype micro fuel cell. For commercial use, the energy source would be engineered to be smaller and lighter than a conventional rechargeable battery. And it is expected to be priced competitively with conventional cellular phone batteries.”

 

This was a “pre-prototype,” so we‘re talking early days here. No real market existed yet, so it wasn‘t until 2002 that Darnell Group even included a forecast for micro fuel cells in its “Portable Power” report. And the forecast showed “no significant sales,” for any application, until 2005. That turned out to be optimistic. In our 2005 update, we pushed “significant sales” to 2007.

 

More important were the applications we projected to adopt micro fuel cells. In our 2002 report, we expected camcorders, digital cameras, mobile phones, notebook computers, and PDAs to be potential candidates for fuel cells. By 2005, the applications had been narrowed down to just camcorders and notebook computers. I‘m sure we‘d be challenged on removing mobile phones from the list, since that market has been part of the fuel cell hype. We were vindicated recently, however.

 

In October, 2006, Nokia stated that, “Consumers will still have to wait a few years before they can swap the batteries of their cell phones for more environment-friendly fuel cells. It is not a technology question, it is more like a supply chain issue at the moment.” The company said that the industry had to sort out how to supply the fuel to consumers.

 

This is why press announcements like the one from NTT DoCoMo and Aquafairy Co. have to be examined closely. In July, 2006, NTT DoCoMo displayed a lipstick-sized fuel cell at Wireless Japan 2006, which can “charge a mobile phone three times.” The size of the fuel cell is what impressed people the most; it is based on a method of generating hydrogen using pure iron, made by reducing hydrogen oxide into pure iron, pressed into a porous shape.

Like all these products, commercialization is vague. NTT DoCoMo said they hope to “productize in 2007 if the price works out right.” There are still safety issues to address, however, and “it is likely that actual product could be delayed until 2009 or later.” That could be an overstatement.

 

Does anybody want a fuel cell mobile phone charger? A quick check of Eveready cell phone chargers shows a small Instant Cell Phone charger that uses easy-to-replace (and relatively inexpensive) AA lithium-ion batteries. Cost and supply chain issues aside, fuel cell products still need to make a compelling business case relative to the incumbent technologies.

 

For example, Sinate also offers an emergency mobile phone charger that works with a AA battery, offering an average of two hours talk time and 40 hours standby time. The company claims that it can be used with almost any mobile phone. If the size of the NTT product is its selling point, the Sinate product looks identical.

 

Darnell Group‘s most recent projection for micro fuel cell growth is 9.8% between 2007 and 2010, based on two applications. We are updating this report and will revisit this market, as we always do. Each edition brings the possibility that micro fuel cells have inched a little bit further to commercial acceptance. But, like everyone else, we keep having to push the “significant sales” date further out. Even if we go with our previous forecasts, the unit market is not going to go much above one million by 2010.

 

I like fuel cells, and I‘ve always felt their greatest value is in stationary applications. It‘s chugging along in those segments and getting good press for distributed and co-generation installations. Companies shouldn‘t downplay this contribution, although it‘s a very different business model (and technology) than micro fuel cells.

 

No matter how much companies try to dress it up, a lipstick-shaped fuel cell is still a fuel cell. And putting lipstick on a fuel cell is like putting lipstick on a pig.

 
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